1. There are no guarantees.
ALSO READ: The Secret to Budgeting: Revealed
Despite what late night gurus might try to tell you, there are no guarantees. Investing is risky and uncertain. That’s why it is rewarded.
2. Investing is not the same as saving!
When you set aside emergency funds or savings accounts, that’s one portion of your financial planning. Budgeting is another. Investing is yet another. Combined, they each
comprise important parts of your total financial strategy – but never make the mistake of putting all of your additional discretionary income toward investing. Again – investing is not the same as saving.
3. Past performance doesn’t forecast the future.
There is a reason a similar disclaimer is included in almost every bit of investment advice: it’s true! Unfortunately, people don’t believe it. While history can provide a great deal
of insight into the probability of certain events, it cannot forecast future events.
4. Diversify, Diversify, Diversify.
5. Fundamentals never go out of style.
Learn everything you can about how the stock market works and stock market investing basics. Understand the industry. Read the business section. Listen to economic data and actually read industry reports. Gather all the information possible and then use it to make your own decisions.
6. Don’t be afraid to be a contrarian.
There are times when the masses are wrong. Fortunes can be made by understanding
when to roll with the crowd and when to go against the grain.
7. Establish a Free Online Paper Trading account at Wall Street Survivor.
Test your assumptions before trying it out in real life.