Do You Really Know Your Own Money Beliefs?

We certainly like to believe we’ve got everything figured out. However, when you’re talking about money matters, they can often be a bit complicated to navigate.

While you may think you know at least the basics, the world of money is so much bigger than a checking and savings account. Take investing, for example. Whether investing scares you or you are all for it, it’s important to know what you’re dealing with — you may change your mind in either direction.

Here are a few tips to make sure you’re on top of your investments:

1. Get Used to The Roller Coaster Ride

Investing can be great, but you have to get used to the fact that things are never constant. There are ways to try and control the ride, but you’ll never be able to tame it completely.

It might take a while to accept the fact this is a totally normal thing, and there’s no need to panic when the value of your portfolio inevitably falls. If you want to invest, you have to learn to enjoy the ride.

2. Really Understand How Investments Work

When it comes to investing, you can’t just worry solely about the day-to-day workings of Wall Street and the market. Events like the Paris terrorist attacks and other global happenings have an impact on the market, whether it is short or long term.

The big picture plays a big role in the grand scheme of things — but that doesn’t mean you don’t want to seriously look into the investments you’re making as well.

Take the time to research and really know the companies you’re investing in. When you’re investing in index funds, make sure you know each of the companies that make up those funds. When you know what you’re putting your money toward, it helps you learn more and gain more control over your future.

3. Learn to Diversify

Making sure your portfolio is diversified is extremely important when it comes to investing. You don’t want all of your assets in one category. Just because you might love beer or technology doesn’t mean you should invest solely in those sorts of companies. If, for some reason, that industry tanks, then all of your investments are gone.

Don’t just jump on the hot new stock that’s projected to grow spectacularly, either. If it’s projected in the daily reports to have a great growth rate, a bunch of other investors are probably looking at the same thing and jumping on it. The value of these can get inflated and drop just as fast as they were projected to grow.

Make sure you ask yourself the hard questions before you purchase any stocks. Really question if it’s something you believe in and if it’s something you see going somewhere in the long run. Playing the long game can really help you in the future, but you also have to know when it’s time to give something up.

4. Trust Sparingly

Yes, putting your trust in a financial advisor to help you with investing is probably a good idea. You still have to know how the market works, though, to make sure you aren’t getting taken advantage of. Know your stuff and make sure you put your faith in someone who knows what they’re talking about.

If you keep on top of things and never stop learning, you’ll end up doing very well with investing. Don’t get passive or too trusting in what others think is a good deal. Stay sharp and make sure you’re the one making the tough decisions when it comes down to it.