When it comes to investing, a key part of making the most profit you can is understanding when to change your mind and when not to change your mind about investments. How can you know which is the right move at the right time? Here are a few reasons to take either step.
Change Your Mind When the Company Changes
Even though you made a considered, well-researched choice to invest in a particular company (or type of company), circumstances may change. Profits and stability can be affected by anything from a change in management to altered market conditions. Never be so attached to a company that you aren't willing to — or feel badly for — changing when it's no longer profitable.
Don't Change Your Mind When Stocks Drop
One of the most challenging things for many new investors is not to panic when the market drops. Natural ebbs and flows are normal, but they are also disconcerting. However, selling stocks when they lose significant value means you lose money on the initial investment and you're forgoing any chance to see long-term growth.
Change Your Mind As You Get Closer to Goals
Investing should have goals and time frames. The most common goal is retirement saving. But the investment portfolio of a young retirement saver should look much more aggressive than that of someone in their 50s or 60s. Understand how to adjust the types of stocks, risk levels, and return expectations as you draw closer to withdrawing money for a goal.
Don't Change Your Mind Based on Questionable Advice
Investment advice comes from a variety of different sources. Unfortunately, not all of those sources know what they're talking about, and many of them don't know your personal financial circumstances. This means you shouldn't act rashly based on opinions from friends, co-workers, family, public figures, or social media accounts. Instead, discuss it with investment professionals so you can make informed decisions.
Change Your Mind When Your Values Change
Not only do companies change, but people change too. If you no longer feel comfortable investing in a certain sector or a company for personal or ethical reasons, it's okay to find new financial investments. Keeping something that doesn't align with your values will leave a negative mark on all your investing efforts.
Where to Learn More
The best way to find the right balance between being steadfast in your investments and adjusting to new circumstances is to meet with a financial planner who specializes in investment planning. Their guidance will surely help you enjoy healthy profits and a happy life for many years.Share