10 things that should matter to you as an investor

Investing in the financial market is placing the money at your disposal in different financial instruments in order to earn. When you invest, you bear the risk of losing the money you have invested.

As a general rule, the higher the yield, the more risk you have to bear. This means that the loss can also be greater. When you invest, you may lose some or all of what you have invested.

Who is the investor?

An investor is someone who wants a greater return on their money than bank deposits can provide. To achieve this goal, investors are prepared to face greater risks in the hope of greater rewards.

Here are 10 things that should matter to you as an investor:

1. Never look at the way other people get rich.

There will always be people with more success, prestige, money and accolades than you. Easier said than done, but without worrying about how much money other people are making can save you a lot of unnecessary stress and anxiety.

2. Choosing the right action.

Picking stocks is harder than you think. Buying and holding is a great strategy for some stocks. For others, it's the equivalent of an investor's death sentence. Discipline and stubbornness are required between investing. 

3. The amount of time and effort you put into your investment.

In many areas of life, more effort leads to better results. This is not true when it comes to investing. In fact, trying harder and putting more effort into your investments will often lead to worse results. When it comes to markets, there are no extra points for degree of difficulty. Most investors would be better off doing less, not more. 

4. Do not track one-year performance numbers.

One year's returns (or any shorter time frame) tell you nothing about you as an investor. Every investor will have good years and bad years. Diversification often looks silly in the short term. Risk management can seem pointless. Luck can win out over skill. You are probably not as good or bad as your short-term performance numbers suggest. The only thing that matters is long-term returns. 

5. Your IQ is not that important.

In investing, EQ matters more than IQ. Yes, a certain level of intelligence is required, but as Warren Buffett once said: "Investing is not a game where a guy with a 160 IQ beats a guy with a 130 IQ. Once you have ordinary intelligence, you need the temperament to control the instincts that get other people into trouble with investing." There are a lot of intelligent people involved in the markets, but not nearly as many people who have control over their reactions. Intelligence alone does not guarantee success in the markets. 

6. Don't take inspiration in financial advice from billionaires.

Very successful people usually offer the worst financial advice. To give useful advice, they are simply in contact with normal people. It's also important to remember that these people are constantly saying things that they don't actually act on. You have to watch what they do, not what they say. And even then, these people don't know your financial circumstances. How can they offer you useful advice? And billionaires have the ability to make huge mistakes with their wealth and still be right. If you make a huge mistake, it will hurt a lot more. 

7. Don't speculate on how much you could earn if you put in just EUR 10 000 there and then.

"If you put $10,000 into..., you would be fabulously rich." Well really! Thanks for that. It's not very helpful. It's also true that if you put $10,000 into Enron stock, you would currently have $0. These fantasies serve no purpose unless you know how to spot them early. 

8. Success in other areas of your life does not guarantee success in investing.

Your biggest risk as an investor depends largely on your personality, emotional makeup, and station in life. The biggest risk for most young investors is that they don't know how they will react in certain market conditions. At a young age, you don't know how much you don't know yet, and that can come back to bite you with interest. For more experienced investors, your experience can actually work against you if it allows you to become overconfident in your own abilities. This is true for people who have found success in other areas of their lives. The worst investors are often those who assume success in their careers will automatically translate into successful investing in the markets. It doesn't work that way. 

9. There is no perfect market timing.

Investors waste too much time looking for the perfect entry point for their investments. This perfect entry point is only known with the benefit of hindsight. It's fun to look at the returns from peaks and troughs for certain markets or stocks, but no one really invests consistently at peaks or troughs. 

10. Trust your instincts. 

Someone said yes, someone said no. Then one man said: "Who cares?" The whole point of investing in the first place is to achieve your financial goals, not to beat the market. 

Take these things to heart and they will save you when making investment decisions. If you don't know how to get started, use crowdfunding platform INVEST IN SLOVAKIAwhere you can share the proceeds from real estate projects all over Slovakia starting from EUR 100.

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