I’ve quite enjoyed talking about stock market investing over the last couple of days, and although it’s probably not something I’ll get involved in myself for a while (I’ve got some more pressing financial goals to achieve before worrying about buying more shares), I’ll try to keep an eye out for investing tips and tricks that might be of use to us novices.
I came across the following list of 35 common sense rules for investing via Lifehacker. Here are some of my favourites:
- Pay off your debts – no point risking more money before you’ve got yourself into the black.
- Do your research – think about what you are investing in and think why you’re investing in it. There is so much more information at your fingertips these days, but it doesn’t necessarily make the job of picking shares easier.
- Time is money – think about compounding.
- Be patient – there are very few chances to make a quick buck unless you get very lucky.
- Be tax efficient – consider investing within ISAs so that you don’t pay more tax than necessary.
- Keep costs low – costs eat into your investment, and mean they have to perform that much better in order to make you a profit.
- Do not try to time the market – it’s virtually impossible; invest when it’s right for you.
- Don’t believe the hype – if you’re investing in something after many others have done so, you’ve probably missed the boat, and therefore missed the best performance.
- Regular contributions are your friend -use pound cost averaging to your advantage to help smooth the ups and downs of the markets.
- Learn from your mistakes – I’ve already talked about mine here.