6 Simple Rules ideal investment

1. Always choose a few areas

Diversification is a hedge against ignorance.

William O'Neill, an American author and successful entrepreneur

For a better understanding, consider the two fictional characters. First name is John, he has 400 thousand rubles, and he chose them to buy shares of a well-known company. The second character - Peter, he also has 400 thousand rubles, but the money to buy the shares at once of ten companies from different industries.

According to the results, the shares fell Vasey and he got the loss. Petya 7 of 10 shares fell, but others have increased several times and made a huge profit. Luck? It is unlikely, because of the theory of probability Peter was originally closer to victory than Bob. Now imagine that the purchased shares are not ten different companies, but thousands, including in foreign markets.

This is called diversification, and it is found in many areas of life. Companies are diversifying production, markets, currency. It should be noted that it is important not just to buy the shares of various companies, and ensure that they are from different industries.

Some popular entrepreneurs and investors criticized diversification (for example, Warren Buffett and Robert Kiyosaki), but the fact remains: it is used, applied and will apply professionals.

2. Be prepared for the worst

My principle is to first of all seek to survive, and then to make.

George Soros, an American investor and philanthropist

The first thing to do when buying securities or currencies - to assess the risk. What percentage of your capital will go to the bottom, if you find yourself wrong? Professionals believe that the acceptable risk rate of 2% of the available funds. The reason is a high probability of losing the series. Imagine that you go wrong 10 times in a row, and this is quite possible. As a result, loss will be only 20%, while risking more can easily be bankrupt.

There is a whole area of ​​administrative activity - risk management. The banks and large investment companies even provide for the position of Risk Control Specialist. If you want to invest correctly, then you should become your own risk manager.

3. Do not pay attention to rumors

Basic information about the market that you learn, usually useless, since the market already has taken into account in their price.

Ed Seykota American professional trader, asset manager

Another rule that stands out by experienced investors, is a global view of the market. Unfortunately, many sources of information to exaggerate the significance of many events in the financial world. Of course, some of the most important news have weight, but do not overestimate them.

Fundamental background - this is only a small part of a huge puzzle that you must solve. The markets are not controlled by someone else's law, there is always a buyer and seller. You never know what the largest participants want to start today to buy assets only his well-known reasons.

4. Be in trend

Trend - your friend, but not at the end, when she goes on a circle.

Ed Seykota American professional trader, asset manager

If you look at the global market, as recommended above, it becomes obvious that the price movements are subject to trends. In some years, the assets become cheaper in other - more expensive, and sometimes marked price range (when prices have a clear direction).

The only possibility to earn on investments - correctly identify the current price dynamics. For this purpose, there are different types of market analysis, for example technical analysis and its direction.

In addition, great importance is the time factor. Estimate the average number of financial instruments held for a day, week, month and year. This information will provide you with the statistical advantage as you set reasonable goals and take profits in a timely manner.

5. Cut losses quickly

Rule number 1: Never lose money. Rule number 2: Never forget rule number 1.

Warren Buffett, the greatest American investor

Any investment often involves a long-term position trade (stock holding). When the transaction brings only losses from it should get rid of as soon as possible.

The most rational approach - make a plan in advance putting a protective stop order on the exit from the transaction. It frees you from the emotional issues associated with the adoption of losses. Many professionals give emotions and psychology, 80% success rate, so that the rule can not be overlooked.

6. Let profits run

When the market goes in a positive direction, you start to be afraid that the next day will take away all your profits and get out of the game too early. Fear prevents you from making as much money as you had to do.

Jesse Livermore, the legendary American speculator beginning of XX century

This rule is closely related to the previous one. It comes down to a reasonable tracking positions. The market is irrational, at times trying to predict its movement is meaningless. Proper money management - a solution.

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Following the above tips and you will be able to protect themselves from many errors and disappointments. Passive income from investments - this is the reality, the more so abroad is already common practice. To be successful, you need a bit of work on them.

What can you say about investments you?