These suggestions are purely a general advice and apply to funds that invested with an intention to keep for a long period (say for a period of 5 to 10 years). Funds that you may need in the short duration of time for the next couple of years, adventurous investment of the same is not proper.
There is no rigid rules as such that how you will earmark your funds and in which stock or securities you will use. You can use your entire money into a particular stock or diversified stocks. You can even focus only on real estate companies, if that suits you proper.
Before putting your money into investment, here are some tips to follow:
Don?t Keep your retirement account idle
Retirement accounts are the tax benefits account so by investing those accounts if you get some extra amount take the opportunity. However, if you need liquid money for sustenance of your retirement life, better you go for short-term investment.
Swim against the current needs courage
Some investors prefer to buy when most others are selling and sells when others are buying. If he is well aware how the company is performing and his knowledge is well researched he will not hesitate in buying the stock, like purchasing quality goods from stores when price is at discounted rate. But one must have great skill and knowledge, act as a contrarian.
Your knowledge is your power, invest which you know best
I came across a lot of successful investors who made convincing wealth without giving much of their time on investment strategies, analysis and market surveys. For example some likes finance sector and that they know better, they put more investment on the same. Some may invest in property as they think real estate will never devalued, like gold. Like the saying no one size fit all, investors also should not put all investment in one stock or company. You should focus on investing in those stock which you know best. Venturing unknown sector can put you in a fix, when the market is in hostile condition.
Don?t make diversified investment
Putting your funds in too may stock market companies are good to a certain level. If you buy so many investment that you can?t watch them regularly or even go through the annual financial results (such as investment in mutual funds), you have diversified investments.
Consider Bear Market as an advantage
While bear market is a tragedy to the most of the investors, speculator finds it good opportunity to invest in the stock market companies. Definitely it need great skill and well knowledge to track stocks those can bounce back and buy them at a reduced price. This is not an easy thing to predict, but one particular stock I am referring is State Bank of India, that was as low as $1 back 10 years and is now trading at over $42. That means an increase of 42 times within 10 years. Look at the stock market companies BSE index which was around 10000 in the year 2005 and now it is little over 17000, that means an increase of 70% within 7 years.
When the stock market is on BEAR stage, patience is the only solution. Stock market can go down low, if your investment is well planned only thing you can do, don?t take any hasty decision and wait. As the stock market companies moves through its various transition, you will be in the place for earning money if you can recognize them before other investors, and act on opportunity you got.