Do you want to make a wise decision in financial investment? If you want to do that then you will have to keep certain unwritten rules of investment in mind. You invest money because you want to secure your life & the generations to come. When you invest, your savings will increase and it will build a capital – with that, economy also will get benefited both locally & globally. There are several schools of thoughts on financial investing. Here are some common unwritten rules of investment. Most of the time, these are proven right. It doesn’t matter what investing strategy you have made. So let’s take a look at the unwritten rules of investment.
No Place for Emotional Decision
It is a human tendency to buy the shares of a company just because they have a personal attachment or liking for that company. This emotional attachment is the result of attachment towards their product. As a result that becomes one of the biggest mistakes while making investment decision. When emotions are involved, logical investing has to make an exit. When emotions are involved, people neglect factors like future growth, market segment & management body concerning that company. It’s very important to evaluate these factors before making an investment. Otherwise you might lose money in future. So emotion should never come in your mind while making a decision on financial investment.
Importance of Historical Trends
Financial market is having a cyclical trend, and this must be recognized by the investor.No doubt, there is no one who can predict the future; however, if you give a little attention on market’s historical trends you will be able to make good decision as compared to others who didn’t perform historical trends analysis.
Never deviate from your investment decision until you get accurate data and information about the market & investment. Never mind people who always pass comments about the state of market. Keep yourself updated about the new investment opportunities. Don’t get carried away by your initial judgment on the information you receive. At the end, financial investment decision should always be taken on the basis of educated opinion.
Having lots of information is only going to help you to make a better decision, so you should acquire as much as information as possible about the market before investing. Information is the only key to making a wise investment decision. Investor must grab the information on global market, company’s historical trend, company’s financial decision and policies of the countries. It has become very easy to get information about historical data of any company, global market etc. through internet. You must do research to find out more about the market & latest trends. And the level of research will decide the success or failure of investment decision.
Investing all your money in one investment option will be a foolish decision in today’s scenario. Since different markets in the world are connected somehow, ups & downs are also dependent on the individual markets. However, the fact remains that no one has been 100% accurate about the market in their prediction. So it’s better to limit the potential losses of the investment by investing in different markets. Diversified portfolio is the common tool used to avoid potential losses. You can invest in other options, for instance real estate, Gold, Debt etc. Hedging of financial instruments is the most common thing done by importers & exporters.
The aforementioned rules are the main unwritten rules of Investment.