The four cardinal rules a wise investor follows

One of the best lines you can learn in the world of investment is “Wise spending is part of wise investing, and it is never too late to start” which is why if you want to use your money that can secure your future at the same time benefit from it, you must be wise in every decision you make.

Wise in a way that your decision making should be based intelligently. Also, you should ask yourself which stocks you should be disposing of, and which one you are acquiring? These and a lot more questions arise commonly for people who are into the investment scene.

foundation capital

If you are new to investment, the questions you frequently ask are just persistently wanting you to believe, but there are certain rules that you have to follow to keep you on the right path leading you to success. To help you out, foundation capital prepares the four cardinal rules of investment that you should devotedly follow.

  • First rule- Never pay for others when you just lose your money- This cannot be avoided at some point in time, but you should never spend or pay your money that you cannot assure that it will be paid back to you, but that can happen to anyone, especially those who depend on hiring a financial advisor— a professional who frequently sugarcoats everything and fails to explain the risks, the rewards, and the required fees that comes along with your preferred investments. Instead of hiring a financial advisor, why not learn how to manage your money on your own? Or practice due diligence just like choosing people that will be helping you. It is not completely wrong to hire a financial advisor, but be very careful when choosing one.
  • Second rule- Plan everything accordingly- Intelligent investing is backed with a strong planning stage which has a good execution after. Having a good plan lets investors reach a much more realistic goal and erases all those grandeurs that they once thought of. Instead of being impatient and want to become instantly rich, why not set realistic financial goals and make it gradually bigger and bigger as your financial capacity starts to grow along with your small successes.
  • Third rule- Select your assets that need to be sold- The next best step to take is to determine the different assets that will vary its performances in different macroeconomic conditions. Meaning, you should always monitor the stocks and commodities that frequently fluctuates especially in an expanding economy, as bonds that goes the other way around in a weak economy.
  • Fourth rule- Never lose focus- A wise investor never loses focus. They focus on their goals, their priorities, and their assets. A wise investor should be able to adjust their asset allocations and their portfolio selection if they have a good focus on the things that matter to them most considering that the stock market is consistently changing macroeconomic and microeconomic conditions which ends up with unpredictable results that might affect the value of your stocks and your assets.

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