Before you start investing, you need to do some research and prepare yourself. When making a portfolio, it is recommended that you divide it up into 90% investments and 10% speculations. Speculations are assets with highly unpredictable outcomes – things like gold, oil, art and collectibles. Keeping your high risk investments at 10% or less of your overall portfolio is a much safer and lower risk way to grow returns and make yourself money. By paying attention to what a major decline in the stock market would do to the security of your family’s well-being is far more critical than any gains that a risky investment may make in the end. Preparation and understanding both the upside and downside of each investment is very important and is something every investor should know before they put money in.
- When you are creating a portfolio, investments should represent about 90% of it and only 10% in speculations.
- Socially responsible investing — that is, making investment decisions based on your moral or ethical values — it is important to make sure a new investment aligns with your personal values.
- New investors should look to dependable return indicators which include things like: income, cash flow growth, individual effort, and investments. By investing your money into funds with dependable return drivers, your odds of successful outcomes increase.
“When just starting out as an investment strategist, Stein explained how naivety and a lack of understanding undermined his portfolio goals.”