Hey this is Chris, so i’ve been investing in ETFs for over 10 years but I know that ETFs now are becoming a lot more popular with a lot of young people and I get asked by some people you know what are the sort of tips you’d share from when you started investing in ETFs all those years ago. There’s probably three I’d focus on if you’re just getting started and if you can do these well you’re going to have a lot of success.
The first one is you don’t want to expect immediate profits, I know it’s very exciting when you get started investing you’re hankering to see those those dollars roll in, but really investing is a long-term game. The chances are you probably won’t even see profits for a few months or even a year and if you don’t that’s totally normal. You know you don’t need to change your strategy or do something different, you just can’t expect to make money on day one or week one because that’s just not how investing works.
The second one is diversify and don’t just double up when things are doing well. Another big temptation when you’re a beginner investing is to look at what’s going well in your portfolio and just keep on adding more only to that. The problem is that it’s often the things that aren’t doing well that then start to do well in the future and the things that have done well that don’t do so well. So if you just keep on plowing money into the one or two investments that you’ve made that have done well, it’s likely to bite you later on, so if you do make some profits, lock a few of those profits in, and use that money to invest into other things that might not have done as well yet.
And my third tip, and this one is probably the most counter-intuitive and the hardest for people to follow – I know from a lot of my friends is just don’t log into your account every day I know it’s really tempting to just keep on checking your portfolio to log in at work on your way home just to see how you’re doing but every time you log in you’re basically creating a temptation for you to do something.
Whether that’s change your strategy or to sell or to buy or just to do something and what we know about investing is the most successful investors are the people that do nothing. They’re the people that aren’t changing their strategy and aren’t leading to brokerage costs every day or changing their minds because that’s actually more likely to harm you so if you can you know you can throw away your password, in fact many of the best investors in the world just don’t check their portfolios at all or if you’re not prepared to throw away your password or give it to someone that you trust, try and just log in once a month or once every few months because that’s going to really set up the right type of behavior, and the right sort of habits so that you can have success and earn great profits from investing in ETFs.
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