10 Steps to Becoming a Successful Investor

10 Steps to Becoming a Successful Investor

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1. Pay Yourself First – Invest regularly on a monthly or quarterly basis at least 10 percent of what you earn. That is only ten cents out of every dollar you earn.6.

2. Setting a trailing stop loss alert. – a simple 25% trailing stop strategy is a powerful strategy for individual investors. 25% trailing stop exit strategy improved the performance of both novice and experienced investors alike.

3. Put More Money into Safe Stocks and Less Money into Risky Stocks – Find a way to make sure that you hold onto your winners instead of your losers. Take equal risk on your investments, instead of putting an equal amount of money into each investment.

Learn to cling to our winners instead of our losers; and put more of our capital to work in more conservative / less volatile investments and just the right amount of capital to work in more speculative / higher volatility investments.

4. Position Sizing – On single equities (common stock) make sure your total position is 5 percent or less, the percentages could be higher on an index, mutual fund or exchange traded funds.

5. Portfolio Allocation – structure your portfolio to be a mix of equities and fixed income securities likes bonds, bond funds, preferred stock, gold and cash. The closer to retirement to more conservative you will need to be.

6. Search for low cost Investments – No reason to use a full service broker, a discount broker or a no-load mutual will return you a far greater amount the longer you hold your investments.

7. Start Early – the earlier you begin investing the better you will earn over the years. Compounding will work miracles when it comes to investment rate of return.

8. Reinvest those dividends – over time dividends reinvested will compound your return. Have your broker automatically reinvest your dividends rather than paying in cash.

9. Establish Written Investment Policy – clearly define your investment goals and objectives.

10. Review and Monitor – Don’t worry on a day by day basis; let your stop loss alerts guide your selling decisions and review performance at least annually.

Daniel F. Iuculano, AAMS CMFC

Accredited Asset Management Specialist

Chartered Mutual Fund Counselor

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