Do Your Own Research

Imagine you go to the grocery store, pick out a bag of apples, take them to checkout, pay for them, take them home, and place them in your refrigerator. You could make apple pie or apple sauce.

Placing the apples in oatmeal sounds like a great idea, too.

There is a high probability that you did not buy these apples to sit in your refrigerator for months simply to allow this fruit to rot.

When you were at the store, before putting an item into the cart, you envisioned how to use it. Its purpose could have been to add to a recipe or eat as a snack.

When it comes to investing money into stocks and crypto, you should already know in advance what your objective is for that asset.

For example, do you want to hold onto that stock for the long term or sell it short? Do you plan on investing in a specific company because of its potential growth or because of its dividends?

These are all critical questions to consider before making any investment decisions.

Just like how you carefully select and plan out your groceries, you should also carefully select and plan out your investments. You want to ensure that you invest in a way that aligns with your goals and objectives.

Investing can be a great way to grow your wealth but also comes with risks. That’s why it’s essential to clearly understand your investment strategy before jumping into the market.

A little research ahead of time can save you a lot of headaches later. Every content creator discussing financial assets often says, “Do your own research.” But what does, do your own research mean and where to start?

Well, the best place to start is to examine its fundamentals and technicals. The fundamentals relate to the overall health of the asset, whereas the technicals deal with the asset’s trend (supply and demand).

Fundamental analysis focuses more on the long term, whereas technical analysis focuses on the short term. Both are important.

Just like it’s not wise to walk into a supermarket and buy a product without reading the labels on the back, it’s also not wise to invest in an asset without doing your due diligence.

Another important factor is staying informed about the overall market. Experienced investors can make money regardless of whether the price is going up or down.

The secret to their success is that they deploy different strategies depending on what the markets are doing and their personal goals.

A day trader may not want to buy a stock that is decreasing rapidly in price; instead, they may want to short the stock. Meanwhile, a long-term investor may see it as an opportunity to buy the asset at a discount.

Investing mindlessly without understanding current news, trends, and economic factors can lead to poor decision-making.

Keep yourself updated on any significant events or changes that could impact your investments.

Investing is an active activity; it doesn’t require hundreds of hours looking at a computer screen, but it does require continuous maintenance.

As the markets are constantly changing, it’s vital to assess your investments and regularly adjust as needed. This could mean selling an underperforming stock or buying more of an asset that is doing well.

Additionally, look for ways to diversify — spreading out your investments across different asset classes, industries, and companies.

This helps minimize risk and ensures you are not overly exposed to potential losses in one area.

For instance, if all you did were invest in your favorite retail companies and the retail industry faced a downturn, then your entire portfolio would suffer. But by diversifying your investments, you can mitigate this risk.

Proverbs 14:15 says,

“The simple believes everything, but the prudent gives thought to his steps.”

Proverbs 24:27 says,

“Prepare your work outside; get everything ready for yourself in the field, and after that build your house.”

Remember, investing is a marathon, not a sprint. It takes discipline, patience, and continuous effort to see long-term success.

It’s also important to have a long-term mindset when it comes to investing. While short-term gains may seem appealing, it’s important to remember that good investments take time to see significant returns.

Doing your own research should not be intimidating; it allows you to take responsibility and authority over your investments instead of solely relying on the advice of others.

In addition to actively managing your investments, it’s also essential to regularly educate yourself on the financial markets and different investment strategies.

This can help you make informed decisions and stay on top of any changes or developments that may impact your portfolio.