6 Tips for Smart Investing
On today’s podcast, I am talking to Saleem Khatri, founder of the website Instavest about his top 6 tips for making smarter investment choices. I am someone who always had a fear of investing; however, after getting trained as a financial advisor, I realized that most of my fears were unfounded and simply the result of a lack of education around investing.One of the biggest requests I always get from my podcast listeners is to talk more about investing, so I thought that it would be a good idea to start with some framework around smart investing. Saleem shares so great tips that you can employ easily to help you make smarter investing decisions.
What are we drinking?
Saleem — Coffee
Shannon — Seltzer water
Podcast Notes:
6 Investment Tips
Only invest money you won’t need for a while
Decide what your cash needs are and then only invest extra money you will not need for a while
Understand what you are investing for so you don’t make the mistake of investing money that shouldn't be invested
Make a written plan for how much you want to invest and follow that plan
A good rule of thumb is to not make any one investment larger than 4%-8% of your entire portfolio
No one investment is perfect and goes up all the time so you want to manage your risk by sticking to your plan
Buy stock/investments with a margin of safety (at discounted prices)
If you are looking to buy a particular stock, research where the stock price normally is and then purchase the stock when it's discounted.
Check to see why a stock is discounted to see if you should add it to your portfolio
Diversify your portfolio
You want to invest across several different sectors
Diversifying reduces the chance of any one investment sinking your portfolio if it goes bad
An easy way to diversify is by purchasing an index fund
Don’t be emotional
Don’t panic if the price of a stock you own goes down and panic-sell
Review the situation; remember, even the worst case situation is manageable
Be patient
Think long-term; Don’t be emotional and start thinking short-term
Investing is not exciting and sexy, but it will get the job done
Make exciting and sexy investing moves with extra money, not your core investment money
Contacting Saleem:
Twitter: @goinstavest
Website: www.instavest.com
Random Three Questions Salem Answered
Which do you prefer: east coast or west coast living?
What is your favorite book about investing?
What is your favorite thing to do during your down time?