Select’s editorial team works independently to write financial review articles that we think will be useful to our readers. We may receive a commission when you click on product links from our affiliate partners.
When it comes to investments, we can be sure of only one thing. No one can predict what will happen in the market.
Despite the myriad investment concepts, books, and data available there, at the end of the day, we can not predict when the market will rise or fall. Investment gurus talk about risk-return, but expert Patrick Geddes argues that there are two conflicting emotions that ultimately lead to our investment behavior: fear (measured by risk) and greed (measured by return).
“Learning how your brain is strained, how your emotions drive your investment, is actually even more powerful than analysis,” he explains.
Sometimes these feelings get the best of us. Geddes calls this concept of making investment decisions based on the Ed Ghats “illusion of control.”
“As investors, we envision a kind of control over results that does not coincide with the unfortunate fact that stocks are fairly casual,” said Geddes, co-founder of Aperio Group Investment Management, a former research director at Morningstar. Author: Upcoming book “Transparent Investments”.
To protect yourself from your worst instincts, check out Geddes’ three tips.
Tip 1. Advance yourself in advance for market collapses
The fall of the markets causes only one thought in the minds of investors. How much do they suddenly lose their investment? It is human nature to want to respond quickly to market downturns, but resist making impulsive changes to your portfolio out of fear or panic.
“We all feel terrible when markets blow like they did during the 2000-2002 technological collapse or the 2008-2009 financial crisis,” Geddes said. “The best advice in such times is to continue the course.”
The market can rise as fast as it can fall. Keeping your money flowing during fluctuations is what helps your money grow over time.
Convince yourself that the feeling of instability is part of the price of putting your money on the market – it will happen again. The best thing you can do as an investor when a market collapses is usually nothing. “Just get out of the storm, no matter how horrible things are,” Geddes added.
Tip 2: Choose index tools for stocks
As a young investor, you may want to find the next hot springs. After all, the stories of how people have turned thousands of dollars into millions are fascinating, says Gedes. But the odds are high against anyone trying to beat the market, even financial professionals.
“Em in terms of culture, you can want to brag if you are lucky. But your real wealth will be greater by going the tedious path of widely diversified index funds, assuming the ability to pick those stocks on average. “Exceeding is just another illusion,” he explains.
You may be surprised to learn that you are likely to do much better with this tedious, anti-Armenian approach to passive investing through index funds. By using your brokerage account to buy diversified mutual funds, you run less risk than buying a stake in a particular company, and you can rest easy as long as your portfolio grows.
The best free stock trading platforms
Choose from over 12 online brokers that offer zero commissions և have narrowed down the top six platforms for all types of investors.
E * TRADER
These six offer a wider range of investment options, user-friendly technology, quality customer support և educational resources. (Read more about our methodology for selecting the best $ 0 commission trading platforms).
Tip 3. Check your portfolio no more than once a year
You’re probably the first to hear from Warren Buffett. Invest in the long run. Checking your portfolio no more than once a year will help you avoid any temptation to make your investment updates due to market changes.
To best overcome the ups and downs of the market, Geddes agrees that in the long run you should leave your investments alone, following the math rather than the excitement of the stock market.
“The more obsessed you are with the daily news cycle, the more tempted you are to jump in, do something, and be under the illusion of control again,” says Gedes.
Investing doesn’t have to be complicated, և The three Geddes tips above show that. Know that there will be market downturns և The best response is not to respond. Your money is safest when you invest in long-term diversified index assets. And it’s normal if you stay for months without checking the progress of your portfolio.
The goal is not to separate yourself from your emotions, says Gedes, but rather to understand how they play a role in your investment decisions.
“We can lead a healthier life with healthier portfolios, the more we develop good habits that are much easier to describe than to implement,” says Gedes. “But at least that’s where we really have control.”
To determine which $ 0 commodity trading platform offers the best services for consumers, select the offers from the list of the top 10 platforms. Then we analyzed, compared each one based on the following factors:
- Minimum account size:
- Account types:
- Account և consulting fees
- Customer support
- Ratio of existing investment costs
- Choice of investments
- Trade fees
- Affordable technology, including mobile platforms
- Educational tools ես resources
After reviewing the above features, we based our recommendations on platforms that offer a wider range of investment options, powerful educational tools և resources, user-friendly technology, as well as the lowest payout-cost ratios. We also looked at the customer support structure of each company, the available ways of communication և software reviews.
Please note that not all trading platforms guarantee that you will have a certain return or that current investment options will always be available. It is advisable to talk to a trusted investment advisor to determine the best approach to your investment goals.
Editorial note. The opinions, analyzes, reviews, or suggestions expressed in this article are solely those of the Selected Editor; have not been reviewed, approved or otherwise endorsed by any third party.