If you want to up your game as an investor, then you may want to hear what the pros have to say. Here are several unique investment tips for the year from businesspeople and investors who know what they are doing:
Focus on the Asset, Not the Sheen
When it comes to investing, hardly anyone has mastered the art as Warren Buffet. The ultimate guru of investing has this to say to all newcomer investors: “always invest in productive assets.” The advice isn’t exactly new. Buffet has said the same thing for years, and it’s for good reason. Investors can easily fall for sales pitches and marketing. If you want to know whether your investment is going to make any money, focus on the product, not the seller. Forget the sheen and analyze hard data on how the asset is performing in the market. If the asset is a retail product, know what its target customer base thinks before spending your money.
Be Tech Minded
If you haven’t been living under a rock, you would know that the future is a world full of new tech, (possibly AI-powered machines). When investing, it’s worthwhile to consider the tech aspects as well, says entrepreneur Jason Sugarman. When investing in retail products, stocks, or even bonds, it’s important to know how tech-oriented the company is. This detail is important because a competitor can easily adopt a new technology and soar past your investment. Companies that are always ready to adapt new technologies have a better chance of surviving in the future.
Avoid the Linear Thinking Trap
The linear thinking trap goes like this: The U.S. stock market performed really well the first quarter of this year. Therefore, it will perform equally well in the next decade. Most investors are naturally inclined to invest domestically. This, however, is a mistake, according to Jeffrey Gundlach, the CEO of DoubleLine Capital. He encourages investors to expand and diversify into the international market. Emerging markets may not perform so incredibly in the near future, but down the line, don’t count on U.S. stocks to only be soaring.
Hedge with Precious Metals
Diversification is highly encouraged for investors from all industries. One of the best ways to diversify and protect cash assets is to buy precious metals like gold. Precious metals protect volatile cash investments from currency devaluation, like what happened during the 2008 recession. No one wants to enter into another recession, but investors should never completely write off the possibility either. It’s recommended to own precious metals, or have some in IRAs.
Avoid Panicking in Selloffs
Selloffs are common in the stock market. Sarah Ketterer, the CEO of Causeway Capital Management, advises new investors not to panic during a selloff and join the frenzy. She advises the opposite: buying. Not in bad stock, of course, but shares and stocks with potential. When the market turns around as it should, you will be the one with all the assets.
Investments can be very risky. Most veteran investors also strongly advise people to leverage higher risks with savings. Never invest your savings. Rather, invest while you save.