Reassuring Points for Nervous Stock Investors
Part of the Stock Investing For Dummies Cheat Sheet
With the world looking so crazy and volatile sometimes, it's important to note that prudent investing isn't just about what you invest in but also how you invest. If you want to build long-term wealth through stock investing and still be able to sleep at night, then consider these points:
Invest in stocks of profitable companies that sell goods and services that a growing number of people want. Your stocks will zigzag upward.
As long as you invest in stocks and exchange-traded funds (ETFs) with human "needs" (rather than "wants") in mind, your long-term investing success will be more assured.
If you keep your money diversified broadly across stocks, ETFs, mutual funds, and hard assets (such as real estate and precious metals) and keep adequate cash in the bank, you'll be much safer in the long run.
Keeping informed every day about your portfolio, the financial markets, and the general economy will keep you from the fear and anxiety that come from the unknown and the surprises that are inevitable.
Being aware of investing tools and using them regularly (such as stop-loss orders and put options) give you more control against the downside and more peace of mind.
Keep a tight control on your debt and finances. In turn, this practice will ease the pressure to invest aggressively with a short-term focus and help you focus more on the longer term instead.