People fail to invest because they think it’s complicated. But, there are a number of internet based resources to make you a better investor.
As I was reading The Wall Street Journal the other morning I stumbled across an article which distracted me from my reading as I stopped to contemplate the newspaper’s target audience. Its demographics are: male 58% – female 42%, average age: 48, household income (broken into two categories): 100k+ and 150k+, and market value of portfolio: $500k+.
I’m sure most of you would agree that the WSJ is a go-to source for financial news, information and investment commentary. But, is it really published with you in mind? After reviewing its audience profile, published in the online media kit, I discovered its audience is predominantly the 1%, and to an even greater extent, the top .1%.
As observed in an article by The Economist, these are individuals with annual household incomes of $380,354+. Many of you reading this are likely under the age of forty-eight with less than ½ million dollars in your investment portfolio. With you in mind, I decided to extend my research and review audience demographics for Forbes, Fortune and The Economist. My findings were essentially all the same. Each of these widely read publications’ aim is to reach an affluent audiences.
While reading keeps you abreast of current events and factors shaping our world – instrumental to making wise investment decisions – reading alone won’t make you a better investor. In addition to reading, I highlight a few simple strategies I feel will make you a better investor:
1.) Go beyond reading newspapers. Read newsletters, blogs and information published by financial authorities available to you online. All of which will help you build an investment strategy. In addition, learn to read and interpret prospectus data and periodic reports.
2.) Have a deep sense of yourself and acceptance of where you are in life at any stage. Know your future earning potential and set retirement goals. Allow your self-awareness to guide you and seek investment information tailored to you. And as your life changes readjust your investment strategy accordingly.
3.) Keep a watchful eye on your money by rebalancing your portfolio every year. If your risk tolerance changes, so should the percentage amounts allocated to each asset class depending on how conservative or aggressive you want to be. Sit down at least once a year to restructure your portfolio.
4.) Develop an understanding of economic indicators. This will help you make predictions about the future direction of the economy and how to rebalance your portfolio. A good resource is the Federal Reserve’s Summary of Commentary on Current Economic Conditions (or “beige book”). It’s published eight times a year and provides insight into the overall state of the economy.
5.) Investment Tools & Resources. Play around with investment tools, calculators and other resources. Have fun with it. The more you practice the more you will learn and build confidence in your investment decisions. Eventually, it should start feel like a sport as you set your game plan and play to win.
Adapting these ideas and making them habits will make you a better investor. If becoming better at investing is your goal, it’s time you start to understand the basics of investing, financial markets, economic indicators and the points highlighted above and not simply rely on the advice and opinions of others.