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Personal finance correspondent Tanza Loudenback sat down with two personal finance professionals to talk about investing during the Master your Money Live Digital Bootcamp “How to be a smarter investor now.”
Kevin Matthews, founder of Building Bread, and Kelly Lannan, vice president of Fidelity Investment’s Young Investors for Personal Investing said smart investors share a few characteristics and behaviors. Here are three of the most important.
1. Start investing early
Heed the golden rule of investing: It’s all about time in the market, not timing the market. The longer your money is invested, the more time it has to grow.
Matthews said smart investors start at “the earliest possible moment,” whether that’s making contributions to their 401(k) or managing stocks family members have passed down.
But they’re not buying blind. Smart investors ask questions to educate themselves and always have a game plan, Lannan said.
“They’re not just jumping in for the sake of jumping in,” she said. Remember that building wealth through investing doesn’t trump the need for an emergency fund or paying off high-interest debt.
2. Stay the course
Global events like the coronavirus pandemic tempt even the most even-keeled investors to think twice about their investments, but the smartest ones know to stay the course.
“They are patient and they are consistent,” Matthews said. Building wealth “is not something that’s going to happen overnight,” he said.
Lannan said not panicking during market upheaval is key to achieving financial goals. A recession will happen more than once in your lifetime, and making decisions based on one period of volatility could be a big mistake.
3. Avoid chasing the latest stock tip
Many millennials have been drawn to active investing during the pandemic to take advantage of a rebounding market, sometimes through risky investments like …read more
Source:: Business Insider