American Debt Project

People’s perceptions of the world are never the same and an investor’s risk profile is often heavily influenced by personal experiences. This is why the investors often pose such a great risk to themselves, since the mistakes they make are based on personal biases and their own behavior.

Being your own worst enemy is a terrifying reality to face, but there is also much to be optimistic about. You may not be able to control the economy or stock market, but you do have control over your own behavior.

To overcome this personal bias, an investor should speak to a large variety of knowledgeable people, especially those with differing opinions from their own. Do your research and question the investment companies you have in mind. The market can be counterintuitive, often irrational and unpredictable. It thus becomes important to expand one’s personal perspectives and understand what drives certain behaviors.

As an example of counterintuitive behavior, consider how people react to an air disaster: Many people put themselves at risk by opting to drive long distances instead of flying, since they perceive it as being safer. Research data indicates that more people have died in vehicle collisions in just 11 days than flying over the past 30 years. In much the same way long-term investors look at short-term fluctuations as a reason to sell, when the data shows that it’s the long-term performance that matters most.

Switching is one of the most destructive investor behaviors and is often fueled by an emotional response to risk. Investment volatility isn’t the biggest risk one faces when investing. In fact, the biggest risk is your actions in response to the volatility. Sometimes what feels like the safer option ends up injecting significantly more risk into your portfolio.

As investors we often ignore the power of simple rules and methods: Don’t spend more than you make, create meaningful diversification in your portfolio and be patient. Most of the time, this is all you need to achieve financial success in the long-term.

This brings us to committing to long-term investment. Patience is the key to long-term success and our emotions can often get in the way. Analyzing the performance of your long-term investment using daily performance data can lead to switching and locking in losses. The market will fluctuate. The one most successful investors have in common is patience.

Financial freedom is a shared dream among many people. The idea of not having to panic every month if there is enough to cover the bill has an obvious appeal. To achieve this, individuals start by putting away money. However, saving is not all there is to it. True financial freedom comes with being able to build a nest egg that you can sustain over an extended period. Some people turn to financial planners to help them put their savings to work. What it takes, though is knowing the right instruments to use for investment.

It is wise for an aspiring investor to find more than one asset to put money in. Different investments carry individual risks, which you must consider before buying in. An investor, especially a novice, should evaluate their risk tolerance to know which instruments are more suitable. The size of your savings can also dictate the type of assets to use.

Cryptocurrency

Digital coins are some of the top-selling assets in the investment sector. With bitcoin reaching historical highs in 2017, more people have started looking at cryptocurrencies as viable ways of investing their savings. Crypto coins are available in different types, which offer a chance to diversify. You have to be cautious, though of the volatility of crypto coins. Because digital currency is not centralised, its value fluctuates a lot. An aspiring cryptocurrency owner should also learn the intricate operational elements of the asset before investing to avoid common scams.

Stocks

Stocks and shares ISA are some of the most popular instruments for long-term investing. The uncomplicated nature of the stock market makes it a suitable choice for beginners. Buying stocks and shares of publicly traded companies is an effective way of earning an income and building wealth. It is possible as well to buy shares in private corporations. The performance of the company is what determines the value of the returns. As with any other asset, stocks come with some risks because companies don’t always register positive results. Online brokerages have further simplified the buying and selling of shares. You only have to pick a platform and get the right resources like market news and price alerts to make trading decisions.

Real Estate

The property market is one money-making idea that never gets old. People are always looking for places to stay or house their businesses, which makes the real estate market a practical alternative for long-term investment. Various asset choices are available when you are looking to enter the property market. You can opt to buy commercial, residential properties then rent them out. If your savings allow it, you can purchase land and construct a building from scratch. Real estate investment funds are other ways to make money in real estate without being a property owner.

Finding the right investment to grow your savings is not a straightforward decision what with the numerous options available. Investors can put money in bonds, index funds, and stocks among others. Always set financial goals before picking long-term investment goals and understand that whichever you settle on, some level of risk is involved.

Day trading is a fantastic method for increasing your bank account without competing for boring corporate jobs that you don’t even want. Do you want to be financially independent? Do you want a career without a boss and without annoying co-workers? Then you need to try day trading. And for that you are going to need an interactive broker like Ameritrade.

Ameritrade is an online broker that allows traders to put money into a brokerage account and to trade securities on the market. The Thinkorswim platform allows for traders to use state of the art research tools and risk analysis tools to find stocks on the market and trade them for profits. The Thinkorswim platform also offers livestreaming investment news and third-party research that can really make the difference with winning trades.

Before you start trading with Ameritrade though, you want to make sure that you are as prepared as possible to be a day trader. You need to take online day trading classes. The classes, along with time spent in day trading chat rooms will give you the foundation that you need to make money as a day trader. The strategies and techniques are there for you to learn and absorb, so that you can go out there and make profits. They have been hammered out over the years of trial and error by veteran day traders who have lost chunks of money and made the mistakes so you don’t have to.

Veteran day traders that have been through the ringer are really the best kind of instructors. Those are the ones that have logged enough screen time to be able to tell you exactly how to avoid the risky trades that will kill your monthly profits. Keeping a profit:loss ratio of 2:1 is key to being a successful day trader. You need to be able to search for home run trades that will double your money, while keeping your losing trades to as low a level as possible. The risk management of losing trades is very important.

No matter what broker you start with as a day trader, whether it is Ameritrade or some other one, you want to make sure that you have logged enough time as a paper trader. Paper trading is trading virtual currency in a simulated environment. The benefits are myriad. You want to be able to practice all aspects of being a day trader without losing any real money. And simulated trading environments will allow you to get used to the stock market and the speed of trading with little risk. It is a win-win.

When you finally open your Ameritrade account, you need to keep in mind one thing. The amount of commissions that Ameritrade charges might put a real dent in your actual profits. When Ameritrade racks up the commissions, that means that making lots and lots of trades on a daily basis can be bad for your bottom line. While the research and tools might be top notch for new day traders, the commission’s might not make the best business decision.