Going with the flow is easy, going against and staying afloat is the difficult bit. It is more or less the same when it comes to sticking to your investment plan. Not sticking to it will definitely get you nowhere but sticking to it might reap rewards. So you should stick to it anyway. Here’s how you can stay afloat longer –
Plan for yourself
Formulate a plan to invest, keeping in mind your specific needs. You could take counsel from a friend who understands money and how it matters or seek guidance from a financial advisor even if it requires shelling out some money, remember – all good things come at a cost. It will be difficult to stick to something that isn’t planned.
Market is fickle
What goes up comes down. A fluctuating market should not deter you from staying focused on your investment plan. If the market is fickle, you don’t be. Ability to remain calm and sticking to your plan will contribute to your investment’s future success. Most investors in an effort to avoid loss often make poor decisions on impulse.
Set realistic goals
There is a difference between easy and realistic. If greed is coming in way of making a success of your investment plan, do away with it. Success does not come overnight. Manage your expectations to earn long term benefits. Regularly review your investment plan and know your options. This will help you come up with necessary changes when needed, to ensure that your goals are met.
Ignore short term fluctuations
If you are investing long term, think long term. Imagine if people sold their shares post the September Eleven incident in 2001 owing to a weak market scene, would they benefit from the rise, in late 2002 extending to mid 2005. Selling when the price is low is a bad choice because in the long run, the price may recover. Patience, my friend is the name of the game!
Investment a habit
Make small contributions on a regular basis to effectively manage short-term investment risks in a volatile market. Whenever you invest in funds regularly, unit prices tend to go up and down so you generally pay whatever lies in the middle. If your investment gains value over time, you will profit from your investments during the short-term price decline.
Keep your emotions in check
Let your emotions not get the better of you. Fear, greed, impulse, under confidence all of these can cause you to take decisions that you regret later, Besides Warren E. Buffet has beautifully put this together in a statement that will continue to represent ideal investor skillset today and for years to come.
“To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside information. What’s needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework.” Warren E. Buffett
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