Introduction to Investing

Many people believe that the secret to financial success is having the ability to consistently choose the best performing investments for their portfolios. Unfortunately, it is an ability that even the most astute investors in the world do not possess.

The real secret to successful investing is much less exciting; it lays in identifying the mix of investments that suits your needs and having the patience and confidence to stick with it.

Two problems can arise. Investors will sometimes stick with investments that don’t match their needs or investors will sometimes move out of investments that suit their needs but which have short term under-performance.

In previous sections I have illustrated how you can lay the groundwork by building a vision and a sound plan to achieve that vision. A similar step-by-step approach should be used when choosing your investments and building your portfolio. It requires that you understand the various investments available, how they react to market forces, and how they work together to provide you with the best possible returns given your tolerance to risk.

 You owe it to yourself to make informed decisions that are suitable for your unique situation. It is treating your money well.

NEXT: Investment Planning - Risk Tolerance