This episode is for investing DIYers, and/or you are interested in learning about portfolio management. Nathaniel and Dan are going to talk about 6 Dos and Don’ts about investing.
- Do have a long-term investment time frame. Please do NOT invest, for example, your down payment if you plan to use it in the short term.
- Don’t time the market, give it time. Nathaniel had some shocking but not surprising numbers regarding market timing.
- Do set parameters before you invest. And don’t overweight your positions in one shot.
- Don’t chase the next “fad”. Trends come and go. Don’t let FOMO (fear of missing out) get the best of you.
- Do understand the tax consequences. The advantages of qualified accounts (for example, Roth IRAs and 401ks) should never be underestimated. In taxable accounts, once you realize your gains, even if you lost it later in other investments (very common for short-term traders), you will still need to pay the capital gains taxes on your gains!
- Don’t forget about the commissions. Don’t let the “$0 commission” slogan fool you, there are so many hidden commissions and fees. Do your research before you invest.
Dan said it well, trading is not investing – if you want to invest for the long run, please follow these do’s and don’ts!
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