The key to successful investing is recognizing what future events you are investing for – such as retirement, sending your kids to college, a new car, or current income – and maintaining an investment strategy that is consistent with achieving those plans. Once you have established a clear and realistic picture of what your investment goals are, then it is time to develop an investment strategy that will put you in the best position to reach those goals. It is important to understand the numerous investment vehicles that are available to you, and which make the most sense to you, given your tolerance for risk, and projected time-horizon of investment.
For the long-term investor, stocks have certain advantages over other investment vehicles in that they have historically demonstrated a stronger performance. They are also the longest-term investment that you can buy. When you are investing in a stock, you are really investing in a company – and that company’s future so it is prudent to have a strong understanding of that company, its business, and the markets in which it operates. KNOW WHY YOU ARE INVESTING IN A PARTICULAR COMPANY. This is certainly no guarantee of performance, but it can help you prevent making an emotional and perhaps unwarranted decision in the future. Inevitably, stocks will rise and fall on a daily basis, but over the long-term if the company that you have invested in executes and succeeds in the marketplace, chances are your investment in their stock will demonstrate proportional growth. TIME IS YOUR ALLY.
