5 Tips an Experienced Investor Could Give to a New Investor

There are many different ways to grow your wealth today, including following the advice of experienced investors. This is one of the main reasons why so many new investors are surfing the internet to find information that can help them in achieving their financial goals. Taking this into consideration, here are five great tips that some of the most experienced successful are sharing with beginners who have a desire to get started.

Tip #1 – Only Put Your Financial Investment Future in the Hands of Resources You Trust

When you are selecting financial advisors and business partners, only select individuals and organizations that you can trust. For instance, when you are selecting investments for your portfolio, you need advisors that will provide you with the facts, good or bad, in every situation. By being selective, you can eliminate the possibilities of working with characters who are either greedy or advisors who will introduce you to illegal practices like insider trading. Remember, however, there is legal insider trading. Do your research on how does insider trading work and find out for yourself.

Tip #2 – Make Investments in What You Know

According to Warren Buffet, you should always focus on eliminating unnecessary financial mistakes. With this little nugget of valuable information, you can save thousands to hundreds of thousands of dollars. This is because you need to know what investments are safe to participate in. In short, start smart by only investing in industries that you are actually familiar with. For instance, avoid choosing investment opportunities in industries that you know little to nothing about. For instance, you may want to pass on investing in companies that focus their efforts on biotechnology, particularly if you do not feel comfortable in its overall operations, trends, terminology, etc.

Instead, choose sectors in business that you are well versed in. For instance, if you have experience in designing and developing new software applications, you may want to invest in companies that have a good financial future in their forecast.

Tip #3 – Use a Strategy That Focuses on Holding Investments for the Long-Run

Every new investor needs a strategy that they can use to maximize financial gains, while also minimizing potential losses. In order to be successful in this area, you should rely on an experienced investor and their mentality of buy-and-hold.

When you are using this strategy, you will only choose stocks that you can hold on to for at least ten years or more. By using this particular investment strategy, you will only invest in companies that have the brightest financial future. For instance, here is a list of companies that are found on the top:

– Apple

– Johnson & Johnson

– Microsoft

– Dover

– Amazon

– McDonald’s

– Google

– Berkshire Hathaway

 Tip #4 – Understand the Differences Between Investment Prices and Investment Value

Another valuable piece of information that every new investor should know is the difference between buying stock based on the selling price and the value of the investment that you are purchasing. Though both price and value may appear to be the same or similar for the newer investor, this is often far from true. It is very important that you learn the basic differences between each term and how to apply them to the creation of your portfolio. In some situations, the price and value can be vastly different and will also control when you should hold on to one of your investments and when you should sell it.

Tip #5 – Learn What Investments Should Be Sold During a Downturn

Always follow the advice that experienced investors provide during a downturn. For instance, during a downturn in the market, you may want to sell all of a company’s stocks if its products or services are outdated.

Or, on the other hand, if you own a lot of real estate, you may want to keep all of your property if it is already high-quality value.

If you are looking to increase your financial wealth, there are many different ways that you can do it. One of the most practical is listening to experienced investors who are already skilled in making good sound investment decisions. These are the experienced investors that can offer great tips like only using trustworthy resources, understanding the differences between prices and value, and holding on to investments for the long run.