As Benjamin Franklin once observed, “An investment in knowledge pays the best interest.” My purpose here is to help you understand the process of growing your funds through investment, and know what questions to ask your financial advisor.
There are no “secrets;” there are no “tricks” to learn. It is a matter of having a foundation of knowledge and understanding how to apply the rules. The goal of theinformation that follows is to help you make investment decisions, avoid financial mistakes, and figure out whom to trust with your money.
By reading this, you are already taking an important first step in your financial success. Most people avoid learning about investments as they believe the information is too esoteric or difficult to understand. It’s not; it’s really just a matter of learning a new vocabulary and the rules that apply to it. I will explain the terminology and demystify the rules.
I will also introduce you to thefive key rules of Successful Investing:
1. Don’t Try to Time the Market
2. Buy and Hold
3. Diversify Broadly
4. Reduce Your Costs
5. Don’t Buy High and Sell Low
These rules can best be understood in the context of understanding how the markets work, discovering the types of investments that can be made, and learning the vocabulary of people who earn their living by helping you grow your investments. As you read what will follow, you will understand how these five rules that seem simple depend on many things. By understanding what underlies these rules you will understand how to apply them to your own situation.