{"id":13998,"date":"2022-11-08T10:39:30","date_gmt":"2022-11-08T16:39:30","guid":{"rendered":"https:\/\/johnsonwim.com\/?p=13998"},"modified":"2022-11-08T11:07:19","modified_gmt":"2022-11-08T17:07:19","slug":"the-top-5-investing-dos-and-donts","status":"publish","type":"post","link":"https:\/\/johnsonwim.com\/the-top-5-investing-dos-and-donts","title":{"rendered":"The Top 5 Investing Dos and Don’ts"},"content":{"rendered":"

The biggest misconception about investing is that it\u2019s reserved for the rich. But there are plenty more myths out there to be aware of. Here’s our top tips on what to lean towards, and want to try and avoid, when investing for the future.\u00a0<\/span><\/strong><\/p>\n

So you want to invest in stocks, but you don\u2019t know where to get started.<\/p>\n

That\u2019s okay! We understand that it can be intimidating at first. But there are many things you can do\u2014both as a beginner and as an experienced investor\u2014to help increase your chances of success.<\/p>\n

While it’s best to begin investing early in life, it’s never too late to start. If you\u2019re new to the world of investing, it can be difficult to know where to begin. Fortunately, investing for the upcoming year does not have to be difficult. Check out Johnson Wealth and Income Management’s top 5 investing do\u2019s and don’ts below.<\/p>\n

DO: Get Started Early<\/b><\/h4>\n

Investing early in life is one of the best things you can do for yourself. Why? It’s simple: time is on your side.<\/span><\/p>\n

In fact, when you invest early, you’re getting the opportunity to help grow your money over a longer period of time. This means that even if you make some losses at first, you’ll have more time to recover and help get back on track with your investments. It also means that if the market continues to grow over time (which historically it has), then your investments will be able to grow even more than if you had waited until later in life to start investing.<\/span><\/p>\n

The sooner you start investing, the better off you’ll be in the long run\u2014and that’s why we encourage everyone to start as soon as possible!<\/span><\/p>\n

DO: Have an Investment Goal<\/b><\/h4>\n

If you are planning to invest money in the stock market, it would be advisable to have a clear investment goal. This will help you plan your investments (and monitor your progress) better. For example, if you want to build a retirement fund, you can invest in mutual funds that offer attractive returns. Having a goal will help keep you motivated and on track with investing.<\/span><\/p>\n

DO: Build a Stock Portfolio<\/b><\/h4>\n

Building a portfolio of stocks is a great way to diversify your investments and help maximize the amount of money you can make from the market. However, it\u2019s important to keep in mind that having just two or three stocks isn\u2019t enough to make consistent money from the stock market.\u00a0<\/span><\/p>\n

And while it\u2019s very unlikely that you can find all fantastic stocks to invest in at once, year after year you can keep adding\/removing stocks to build a strong portfolio that can help you reach your goals.<\/span><\/p>\n

DO: Diversify your Portfolio<\/b><\/h4>\n

Diversification<\/a> is one of the most important things you can do to help protect your portfolio. It’s tempting to want to put all your eggs in one basket\u2014to invest all your money in one stock or just a few stocks, in the hopes that you’ll make a killing when they skyrocket. But the risk involved with investing in just one stock is often much higher than if you had a portfolio of ten stocks. Even if one or two of them start performing poorly, it probably won’t affect the entire portfolio too much.<\/span><\/p>\n

When it comes to diversification, less is more! Your stock portfolio should be sufficiently diversified so that even if one or two stocks aren’t doing well, the rest will offset those losses.<\/span><\/p>\n

DO: Invest for the Long-term<\/b><\/h4>\n

If you want to help build wealth from the market, invest for the long haul!<\/span><\/p>\n

It\u2019s a common fact that veterans of the stock market who made an incredible fortune from stocks are long-term investors. But why does long-term investing help to build wealth? Because of the power of compounding, wonderful, fruitful compounding.<\/span><\/p>\n

Compounding is when your money helps earn interest on its own interest. It is calculated by multiplying the initial principal amount by one plus the annual interest rate raised to the number of compound periods minus one. The total initial amount of the loan is then subtracted from the resulting value.\u00a0\u00a0<\/span><\/p>\n

Calculating compound interest looks complicated, but it’s actually as simple as plugging some numbers into the right formula. The formula for calculating the amount of compound interest is as follows:<\/span><\/p>\n