There’s never a bad time to ask questions about your investing process. If you learn something now that you didn’t know before, and it will help you in the future, why not ask questions? Here are six investment questions everyone should ask and answer to avoid often-costly mistakes in their investment portfolios.
- What type of investment are you buying?
- When is a good time to buy?
- How much should you buy?
- What do you do when it’s a winner?
- What do you do when it’s a loser?
- What do you do with it if it does nothing?
What to buy?
Here is where talking with an investment advisor is a good idea. Everyone has some ideas on what to buy, but a financial advisor has (hopefully) done their research and can give you sound qualified advice. Choose an advisor with experience like Keith W. Springer who has over 30 years of industry experience.
Is now a good time to buy?
It’s difficult to pinpoint the best time to buy a particular investment. The timing will likely depend on many different issues: Overall is the market positive or negative? Are the products you are looking at positive or negative? How attractive is the price? Doing your research and not going blindly into an investment is key to your success.
What do you do if it’s a winner?
Before you buy it’s important that you have an exit strategy that helps you determine when to sell.
What do you do if it’s a loser?
The same applies when a stock is a dud. Having a number in your head before and sticking to the plan is the key to your long game success
What do you do if it’s simply a lazy investment?
If the investment is just sitting there not making or losing you money, can it be better invested somewhere else? How long you wait to see if there is positive movement and what to do when there isn’t are all questions you’ll want to answer before investing.
How much to buy?
This is the most difficult question to answer. Hindsight is 20/20, and we don’t have a magic crystal ball. The point is you need to understand the risks and the payouts and base your decisions on how much you can afford to lose with that particular investment. As a percentage of your overall portfolio, how much are you willing to risk? That is the question to answer.
What, when, how much, as well as what to do if it’s a winner, loser, or laggard are all questions to ask and answer before you make any investment decisions. No one can respond to these questions for you as every decision is personal but a reliable and experienced investment advisor who understands your goals will go a long way to help answer these valuable questions.