While all investing does carry risk, you can minimize any possible damage by embracing some basic truths before gambling your hard-earned money.
"The challenge is that most investors have investment habits that result in poor performance compared to the overall market," explains Singer, the president of Singer Executive Development, a professional training and development company that optimizes business performance of employees and executives.
"It's important to carefully invest the profits to generate wealth," he explained on Naples News.
"Investing in stocks comes with high risk. Take the time to learn about investing and reading financial statements. If you don't have the time for the research, leave it to the professionals and seek help, or utilize low cost mutual funds," he wrote.
"Start early and take advantage of tax-advantaged investment vehicles. Take the first steps, invest early and eventually you will change your life."
Highlighting three of his seven tips:
- Most people should not pick individual stocks: “There are many aspects of investing that work against you, including human nature, herd mentality, time constraints and the inability to understand financial statements, to name a few. Most investors would be better off with a portion of their investment funds in a low cost mutual fund that tracks the S&P 500 and a portion in a high quality bond fund,” he advises.
- Don't panic: Compound interest is one of the great wealth creators of our time, but if you sell in a panic, you will not achieve good results, he wrote. "The worst thing you can do is "follow the herd over the cliff" and sell at a market bottom. I've watched friends do this since 1987. Dollar cost averaging works far better than trying to time the market. For those that are willing to take the long but sure road to building wealth, I cannot emphasize enough the power of compound interest."
- Never buy on tips: "The taxi driver, the bartender and even your best friend may give you stock tips. Make a promise to yourself to never, ever buy stocks based on a tip. Some of the worst investment mistakes I have ever made were based on taking tips from people I consider to be intelligent. Do your own research before you make the investment."
And while plotting your own investment strategy may seem like a difficult and intimidating task, but financial guru Matt Towery
says it's all a matter of keeping on top of today's news headlines, public opinion surveys and other easy-to-find information.
"Warren Buffett says you have to read, read, read all the time and he's right," Towery — author of "Newsvesting: Use News and Opinions to Grow Your Personal Wealth,"
published by Looking Glass — said on "Newsmax Prime"
with J.D. Hayworth on Newsmax TV.
"You start collecting and looking at news on a day-by-day basis and basically journal it down…. Oil is a great example. We had an oil glut long before anyone was writing about it, but no one was taking advantage of the opportunity to start investing in that and buying oil cheaper until it dropped.
"But if you had been following it, you would have been out of those oil stocks early and you would have been back in when they were down at $40 a share, such as with ConocoPhillips. So you can really do it, anyone can, if they just take a measured approach to it."
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