Financially speaking times are tough out there for everyone right now. Many people are having to resort to looking for a second job or starting a side hustle just to make ends meet. Many nations are facing a cost of living crisis while wages stagnate. And the global economy is still bouncing back after the Covid-19 pandemic.
One of the most profitable side hustles you can pick up is investing. It is such a broad field with many different investment avenues available to you. And, most importantly, if you dedicate enough time to it you can easily create passive income streams over time. Something that can prove to be invaluable in these difficult times.
But making smart investments isn’t easy. I have spoken to a number of seasoned investment veterans. From a variety of different markets. And I have put together these five key tips to help you make better investments. So, whether you’re just starting out, or simply looking for a way to better diversify your portfolio, these tips are sure to help you out.
Deep Dives
One of the fundamental aspects of smart investing is something called a deep dive. This is where you conduct rigorous research into your potential investments. The term is very popular in the crypto community. But the ideals apply to all forms of investing.
Deep dives involve looking at nearly every aspect of a business, crypto, product, or individual. You want to see how well the business has been doing over the last few years to gauge how safe an investment this is. Or, if it is a new venture, what qualifications do the founders have and will they be able to deliver results?
If you also need to study how well a stock, cryptocurrency, or business has done financially over its entire lifespan. Has its value steadily risen? Is it more prone to dips? What are the potential returns on your investment over different periods of time? When it comes to a deep dive you can never do enough research.
Diversify
Perhaps one of the most important tips I got from all of the veterans I spoke to. Having a diverse investment portfolio is important for a number of reasons. Firstly it ensures you aren’t putting all your eggs in one basket. Investing is still gambling, no matter how secure a venture might seem. By having a diverse portfolio you are ensuring that, if one venture goes bust, you can cover the losses easier.
It is also vitally important for learning more about investing in general. Having a diverse portfolio will allow you to see how different ventures operate and give you a better understanding of the cycles of different markets.
Try to invest in a lot of different ventures where possible. Don’t just trade in one thing like stocks or crypto. Consider joining a prop trading firm or downloading virtual forex trading apps to learn about different investment opportunities and to diversify your portfolio.
Don’t Panic
One of the biggest mistakes new investors make is panicking when they see one of their investments starting to lose value. It can be scary to think about how much money you stand to lose. And the knee jerk reaction is to quickly panic sell to at least regain a bit of your money.
The advice here is to hold strong. Chances are this is just a temporary dip. Instead of selling you should do some research. Why is the price dropping? Has the company made a new announcement that has destabilized the price temporarily? Or maybe this is just the time in the markets where prices tend to dip.
More often than not a temporary dip in price is indicative of a massive rise in price. And all too often people panic sell and end up losing out on considerable profits. This also ties into the idea of having a diverse range of investments. You can feel better about not panic selling if you know you have a lot of backups in your portfolio.
Networking
One of the most invaluable skills you can learn in the investing world is networking. Building connections with other investors and businesses. This will help you in a number of ways. First, it is the best way of learning about new investment opportunities. Online speculation can only help you so much. First hand information is far more valuable.
Networking with businesses is also a great way to get in on the ground floor with new investment opportunities. Especially for local businesses like restaurants and bars. People in the service industry are often very well connected and know about new ventures. So building connections with restaurant owners is a solid idea that can help you diversify your portfolio.
