Here Are 6 Ways To Make Investing As Simple & Successful As Possible
Whether you’re a beginner or investing pro — follow these simple steps for success.
Learning how to invest can be overwhelming. Where do you even start? What are the best resources? And more importantly, how does one become successful at investing?
If you’re currently studying and want to break into the world of investing, it’s always a smart idea to try with a small amount of money first. Invest only what you can afford to lose. This way, if things don’t quite work out, you haven’t lost heaps of cash.
This guide will show you how to invest in the simplest of ways on a student budget, and increase your chances of success. Everything is broken down so you don’t have to worry about mind-boggling terminology either. We’ve got you covered!
Investing sounds hard — can’t I just use a savings account?
Having a savings account is fantastic for rainy days. However, simply having money in a savings account doesn’t grow any further than the interest offered by your bank.
That’s why so many are turning to investing. It provides an opportunity for greater returns on any money invested over time. You can lower the level of risk you take when you invest by spreading your money across different asset classes to create a diversified portfolio.
Simple ways to invest and be successful
When you sign up to an investment platform like eToro, you’ll need to start thinking up a strategy. Here are the most simple ways to do so and increase your chances of success.
Try CopyTrading
CopyTrading is essentially automated trading. It works by copying from one trading account to another. It mirrors the trades of successful investors, based on their risk score, returns and more.
In theory, it’s straightforward. Simply add the amount you wish to invest, do some research on the trader you want to follow, and then copy their portfolio. This will replicate the trader’s positions into your trading account. eToro has a whole guide to CopyTrading if you wish to understand it further.
Just be advised that everyone can make mistakes, even the top traders in the world. It’s good to have an understanding of how it works before making a decision to use CopyTrading. This is why we recommend starting with a small amount to get to grips with it.
1. Smart Portfolios for long term investment
Just what are Smart Portfolios? Smart Portfolios are curated collections that track a specific theme or strategy. With Smart Portfolios, you can instantly diversify your holdings by investing in multiple stocks and assets with a single click.
Think of these grouped assets as a group of Auto Industry, Battery Tech, stocks or cryptocurrencies. These portfolios give investors, such as yourself, access to innovative investment themes.
This thematic approach to investing is designed to help investors diversify their portfolios, minimise long-term risk, and take advantage of current market opportunities and future innovation too.
2. Diversify your portfolio
You’ve surely heard the phrase “never put all your eggs in one basket”, right? The same applies to investing. There’s potential for higher returns in the long run, but this is highly dictated by your experience as well as market conditions.
By diversifying your investments, investors including beginners, can achieve smoother, more consistent investment returns over the medium to longer term.
3. Know your risk tolerance
If you’re new to investing, seeing your portfolio decline can feel quite disheartening and unsettling.
What is risk tolerance exactly? It’s the level of risk that you, as an investor, are willing to take. Many factors can affect this, including your lifestyle, behaviours, attitude and mindset. It can also depend on your investment time horizon and ultimately, what you can realistically afford.
To determine your risk tolerance, you need to keep your investment goals on the forefront of your mind. Are you wanting to just make some extra cash on the side? Or do you want to build a lucrative business of your own?
If you want to know the nitty gritty and sign up to an investment platform like eToro, you’ll be pleased to know that they have a dedicated page all about how investment risks are calculated.
4. Invest responsibly
You don’t need a huge lump sum to start investing. In fact, investing with small amounts to begin with is far less risky and will help you get to grips with the investment world.
By investing a small amount of money each month you are less vulnerable to market fluctuations. Alternatively, you can practise investing risk-free on eToro with a $100K virtual portfolio.
5. Dollar cost averaging
For many investors, dollar cost averaging can be an excellent way to avoid the impossible task of attempting to “time the market”, as well as present a lower risk investment strategy that offers the chance to hedge against market swings.
So what is it? Dollar cost averaging involves investing a fixed dollar amount set by you on a regular basis, regardless of the share price. It’s often used as a way to develop good, regular investing habits, learn from successes and failures, as well as automate yet another process for investing.
6. Always be willing to learn new things
The investing market is hard to predict and often volatile. It’s what makes it both overwhelming yet exciting. By learning the intricacies of what it takes to be a good investor, you can make more calculated choices. Just be patient and trust the process — these things can take time!
If you need further resources to help you along your investment journey, eToro’s news and analysis is a great place to stay abreast of current investment news. If you want to take it even further, the eToro academy teaches you everything from the basics to advanced investing skills for free.
Want to invest with a trusted platform? Sign up on eToro and get a bonus $10 USD when you invest $100 USD worth of crypto.
This article is for educational purposes only. Do not understand it as financial or investment advice. Consult with a financial advisor if you’re ever unsure of how investing works, or are experiencing financial difficulties.
This is a sponsored post in partnership with eToro.