Below, we outline the six basic principles of effective investing.
- 1. Only invest as much as you can lose.
This is the number one rule that every investor should take to heart. Even the biggest money is not worth the risk of bankruptcy.
- 2. “Be greedy when others are afraid.”
The motto of one of the world’s richest stock market investors, Warren Buffett who also advised to be afraid when others are greedy.
- 3. Keep your funds safe!
Please don’t keep them on an exchange account. Only keep them in your wallet (the electronic kind, of course). Exchanges fall prey to hackers, go bankrupt and crash. An electronic wallet is an absolute standard.
- 4. Create an account on several exchanges.
Those using just a single platform are more likely to suffer severe financial losses.
- 5. Diversify your capital.
Divide it into several parts, each representing a different type of asset. For example, invest some funds in Bitcoin, some in Ether, and the rest in yet another currency. This way, you can protect yourself from the consequences of one of the currencies going down in value.
- 6. Follow the principle of gradually increasing profits.
Spectacular profits occur very rarely and often happen by chance rather than due to a well-thought-out investment strategy.