Investing is inherently risky. There are, however, ways to mitigate the risk of incurring investment losses. Number one on the list is to educate yourself. Here are four ways to do just that.
Reading is fundamental
There’s an entire library of books on investing and personal finance out there, and many, although not all, of them are excellent. Do your homework, find a few good ones, and read them cover to cover. A couple of suggestions to get you started: How to Buy Stocks by Louis Engel; Making the Most of Your Money by Jane Bryant Quinn; and my favorite, The Intelligent Investor by Benjamin Graham.
Watch and wait
Choose a few stocks you find interesting, ones you’re considering investing in. Then watch and wait. Check their stock prices daily. You can learn a lot if you give them some time and see how they perform.
Learn the lingo
Like any other profession, investing has a language all its own, and to succeed you need to learn the lingo. From the difference between stocks, bonds, and mutual funds, to terms like asset allocation, dividends, market capitalization, price to earnings ratio, target-date fund, and prospectus, you need to know the language to best understand how to invest and how to monitor your investments.
Want to learn about three more ways to educate yourself before investing? Read the entire article now on the ChapmanAlbin website!
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