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3 Things I've Done Right as an Investor

By Maurie Backman - May 6, 2021 at 5:18AM

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As an investor, I've made plenty of blunders -- but I've also made a few wise choices throughout the years.

I'm not the type of person who likes to toot her own horn, and I've certainly made my share of investing mistakes through the years. When stocks tanked last March, for example, I tried to buy Netflix at just the right time, and in doing so, missed out on that opportunity.

I've also, way back in the past, sold stocks in a panic when their values began to sink. Had I waited things out, I would've minimized my losses. And let's not forget the fact that I didn't even start investing in stocks until I was almost 30 -- though to be fair, I had my reasons for that.

But despite all the hiccups I've encountered in the course of my investing career, there are a few things I've done right. And I'm sharing them so that other investors can aim to do the same.

Smiling woman at laptop

Image source: Getty Images.

1. I've educated myself on what to look for in a stock

Some people buy stocks because they're familiar with the companies behind them and like their products. That's not a bad foundation for buying a stock, but it's only part of the picture. As a general rule, I won't buy a stock unless I understand:

  • How it makes money
  • How it manages its money
  • How its growth or value may be threatened
  • What gives it a competitive edge

These guidelines have helped me establish a portfolio that I believe is designed to help me meet some of my long-term goals.

2. I've committed to investing, even during periods of market volatility

Many people shy away from buying stocks when the market crashes. But actually, that's a great time to add stocks to your portfolio, and it's something I've made a point to do through a number of more recent downturns. (I may have missed out on Netflix this past March, but I did load up on other investments I'm happy with.)

In fact, my general strategy is to invest on a regular basis, regardless of how the market is doing. At the same time, I try to stockpile extra cash for market crashes, because that's when solid buying opportunities can arise.

3. I've diversified my holdings

You'll often hear that having a diverse mix of stocks is important for both growing wealth and protecting yourself in the face of downturns. Even early on in my investing career, I made sure to buy stocks from a few different market segments, even though I was tempted to mostly load up on tech stocks due to the potential I saw in them.

Having a diverse portfolio has helped me weather periods when tech stocks were volatile. And to this day, the fact that I own a wide array of stocks gives me the peace of mind I need to sleep well at night.

Trust me when I say that I'm far from a perfect person, and I'm certainly not a perfect investor. But there are a few things I've gotten right in my day when it comes to investing, and I'd encourage anyone who's new to the game to give these strategies a try.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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