It is most peoples dream to have a lot of money and to be able to live the life of luxury. Being smart with your money is the key to gaining personal wealth and keeping it. Smart personal investers research their options and make rational decisions. Here are some investment tips to help you on your way:
Don't put all your eggs in the one basket. A cliche that has earned its place. Whilst one market may look incredibly strong at the moment, there is always the chance that something will happen and perhaps they may be a total turnaroud. Spread your investments into a number of areas and types of investments to safeguard against this. Most often, the big money returns are from investments that are risky and can easily lose you money. Managed funds can be a way to diversify with little work on your part. This can be taken even further by investing in more than one managed fund to account for one investment manager having a bad period.
Don't chase previous performance leaders. Past performance is a good indicator of an investment, but should not be your sole investment criteria. Long term investment performance is more impressive than short. A good previous year does not guarantee success the next. Maybe they invested in an area that had a boom and this trend may not continue.
Investing smaller amounts over a longer period of time rather than a large lump investment can help shelter you from a possible market drop.
Don't invest more than you are willing to lose. This is personal choice, but consider what can happen if your investment choices turn bad. Can you handle being without that money? Investing is a form of gambling and it can ruin lives.
Fees compound and can make a big overall difference to your investments over the years
Don't invest based on how much tax you are going to save, invest to make money. Just because you are saving money on tax, does not mean your total earnings will be higher. Perhaps another investment has less tax advantages, but will make you a lot more money.
Smart investing can mean not being greedy. A lot of people will make the mistake of hanging around too long and not taking their profit. When is the right time to sell, that is always the hard questions? One rule is to sell when you make half your money back as profit.