Is it already?

Before you start investing, you should first of all make sure that you are ready for it financially, mentally and that you have the knowledge about investing. You should also think about whether you have the right amount of money to invest and whether you are able to handle the emotions associated with investing.

Fourth principle - Set yourself goals

Investment objectives are essential in order to know how much money to invest, what assets to invest in, what returns to expect and over what time period. Formulating clear investment objectives allows you to better organise your activities and manage your investment portfolio efficiently. Developing a strategy that takes into account the objectives set enables more effective decision-making, even in situations of uncertainty or market turbulence. It is worth refining your investment objectives in terms of various aspects, such as time horizon, rate of return or level of risk. When determining the time horizon, it is important to consider whether you are investing funds for the short, medium or long term. Different time horizons will influence the choice of appropriate financial instruments and investment strategies.

Rate of return and acceptable level of risk

Another important element is to define the expected rate of return. Realistic assumptions will avoid the frustration of unrealistic expectations and allow you to better tailor your strategy to your needs and capabilities. Determining the level of risk an investor is able to accept is also key. Investors with different risk profiles will choose different instruments and investment approaches. Those who are more conservative will direct their funds into lower-risk assets such as bonds or stable growth funds, while investors with a higher risk tolerance will opt for more speculative investments such as equities or cryptocurrencies.

Flexibility and evaluation of investment targets Investment objectives should be flexible and subject to evaluation as life circumstances, market situations or personal preferences change. Regular evaluation of objectives allows them to be modified and adapted to current conditions, resulting in better management of the investment portfolio and achievement of the desired results.

Fifth rule - look with whom you are working

Choosing the right intermediary, such as a broker, financial advisor or stock exchange, is crucial to investment success. By working with trusted partners, you will gain access to better tools, information and support, which can contribute to better results. Before making a decision, it is advisable to carefully analyse the credibility, fees and offerings of each intermediary. It is also important to pay attention to the experience and reputation of the broker in question in the market. It is important to check whether the company is operating legally and whether it has the relevant licences that guarantee its honesty and reliability. Feedback from other investors can also be helpful in assessing the credibility of a given intermediary.

Another important aspect is the service offering. It is worth checking that the intermediary in question offers all the financial instruments in which you are interested and that its analytical and educational tools are adapted to your level of sophistication.

The fees that come with using an intermediary are also not insignificant. It is a good idea to compare transaction costs, commissions or subscriptions and consider whether they are competitive with other available options. Lower fees may translate into a higher net return on investment.

Sixth principle - diversify your portfolio

Portfolio diversification is a method of investing funds in diversified assets in order to reduce investment risk. By investing in a variety of financial instruments, such as shares, bonds or mutual funds, you gain the ability to protect yourself against potential losses resulting from unpredictable market movements. A well-diversified portfolio allows you to reduce risk while maintaining the upside potential of your investment.

To effectively diversify a portfolio, it is worth investing in different sectors of the economy and geographically dispersed markets. By investing in different industries, you reduce the risk arising from potential problems in one sector. Investing in assets from different countries, on the other hand, helps to hedge the risks associated with the economic situation of a particular region.

In the diversification process, you can also use an investment approach based on different asset classes, such as shares, bonds, real estate or commodities. Each of these asset classes has its own distinctive characteristics that can affect their value in different ways, so by investing in different asset classes, you limit the risk associated with fluctuations in the value of individual instruments.

However, diversification should not be excessive. Having too many investments can lead to difficulties in portfolio management and lower investment efficiency. Therefore, it is worth finding the right balance between the number of investments and efficient portfolio management.

Rule seven - keep your emotions in check

Emotions play a big role when investing. Overly strong emotions, such as fear or greed, can lead to wrong decisions, which in turn can result in losses. Therefore, it is important to keep a cool head when investing and make rational decisions based on analysis and acquired knowledge. In order to avoid acting under the influence of emotions, it is a good idea to apply risk management strategies, such as the use of stop-loss orders or diversification of the investment portfolio. This approach helps to minimise the impact of emotions on decision-making and to achieve better investment results.

Eighth principle - Educate and develop

Education is crucial to investment success. Knowledge of different financial instruments, investment strategies and market analysis is essential to make informed investment decisions. It is advisable to use various sources of knowledge, such as books, articles, courses or educational platforms such as the Webinar Universe training platform. By continuously improving your knowledge and skills, you can invest your funds consciously and effectively. Investing is a process that requires adequate knowledge, experience and the ability to control emotions. It is worth applying the above principles to increase your chances of investment success. Education is key, so take advantage of various sources of knowledge to help develop the skills needed in the financial market.