7 Rules Of Investing

7 Rules Of Investing

February 25, 2020

Is investing an art or a science? If you want to succeed in investing, does it take a set formula or skill and talent? Either way, investing can seem intimidating and overwhelming. But you don’t have to just cross your fingers and hope for the best. Whether you choose to purchase stocks and bonds, contribute to a retirement account such as a 401(k), or even invest in real estate, there are rules to investing wisely, and following these 7 rules of investing will help put you on a path toward reaching your goals (hopefully without headaches).

1. Manage Your Emotions

Behavior is a major factor in investment success. By being aware of your emotions and knowing your behavioral pitfalls, you can avoid many investment mistakes caused by panic. Finances are an integral part of our lives and it’s difficult to separate them from our emotions, but your nest egg will thank you if you can learn to take your time when making decisions and stay strong and committed when the market feels like a roller coaster.

2. Stay Away From Market Fortune-Tellers

Wouldn’t it be wonderful to have a crystal ball to predict where the markets will go or what the economy will do? Unfortunately, it’s not that simple. Don’t worry about what you can’t control, but channel that energy into focusing on the factors you can impact, such as the types of companies or funds you invest in and how much you save. On that same token, don’t make your investment decisions only based on past performance. Just because a mutual fund blew everyone away last year doesn’t mean it will thrive this year. 

3. Develop A Long-Term Perspective

You may want to check financial tasks off your to-do list in a hurry, but remember, investing isn’t a race. It will take time for you to reach your goals, and if you go in with that mindset, you’ll likely see more growth and celebrate the small victories along the way. 

4. Control What You Can

It’ll be easier to stay committed to your long-term plan if you control what you can and let go of the rest. That’s why it’s important to clarify your goals, needs, and time horizon and design a plan tailored to your unique situation. Having an investment philosophy and strategy will give you purpose when hard times come. Your reason for investing could be to save for retirement, put aside money for college tuition, or save for a down payment on a home. Knowing your purpose makes the journey more meaningful. 

5. Avoid Unnecessary Risk

All investing involves risk, but that doesn’t mean you just cross your fingers and hope for the best. The level of risk you take should correspond to your age, time horizon, and goals. Your portfolio isn’t the place for speculation or bets, and your plan should reflect your risk tolerance. 

6. Start ASAP

Since investing is a marathon, time is on your side. The longer you allow your money to sit in an investment account, the more time you’ll have to reap the benefits of compound interest. Don’t save investing for the future when you feel more prepared. Each year you wait means you’ll need to save more in a shorter amount of time.

7. Diversify Your Investments

It’s drilled into us pretty regularly that we need to diversify our portfolios. Since investing is never a guarantee, you want to invest in various formats and companies to reduce your risk of loss. That way, if a company goes down or an industry tanks, you don’t lose all your money at once. 

Rules To Live (Or Invest) By

Investing doesn’t have to be complicated, and it doesn’t have to scare you. If you want to pursue a better investment experience and implement these tips into your investment strategy as you pursue a secure financial future, our team at HBA Wealth would love to help. Contact us at (626) 529-8347 or email Ricky directly at ricky@hbawealth.com to start taking control of your money and stay informed about your investments.

About Haydel, Biel & Associates

Haydel, Biel & Associates is an independent financial advisory firm serving individuals and families near Pasadena, California. The firm was founded in 2004 by Chris Haydel and Ricky Biel with a desire to provide unbiased, client-centered, community-based financial advice. Together, they have built a practice that has grown into a family of caring, smart professionals committed to blending proven investment methodologies with creative financial technologies that make it easier than ever to accomplish your goals. They strive to keep things simple and fun to give their clients peace of mind and alleviate financial stress. HBA Wealth takes care of their clients’ needs first and foremost and goes the extra mile to make their clients’ finances grow. To meet and see how the HBA Wealth team may be able to help, contact them today at (626) 529-8347 or email Ricky directly at ricky@hbawealth.com.

The commentary on this blog/website reflects the personal opinions, viewpoints and analyses of the Haydel Biel & Associates employees providing such comments, and should not be regarded as a description of advisory services provided by  Haydel Biel & Associates or performance returns of any Haydel Biel & Associates Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Haydel Biel & Associates manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.