The suggestion that you should only invest in things that you know about may sound very simple, but the reality is that there are so many who do invest without real knowledge. I was guilty of this a couple of years ago, when I invested a small amount — thankfully —into the crypto market. I hadn’t learned enough about that market and instead invested because everyone was doing it, and realizing profits. I ended up losing it all back in 2018 when the prices dumped, and learned a hard lesson about investments.
After seeing the Traynor Capital Management reviews online, I changed my strategy and let them handle most of my investments, in markets which I don’t understand. The rest I invest where I do have knowledge, and here is why that makes so much more sense than following trends.
Level of Research
It is not just basic knowledge which you need to invest, you also need that knowledge just to do research. For example I have a good understanding of what the blockchain is, and how crypto works. This is all well and goo but it doesn’t help me in identifying which cryptocurrency I should be investing in. The same can be said for real estate and shares. This is why you should always look to have the knowledge in order to then be able to go on and identify what to buy, how much to buy and how long to hold it for.
Susceptible to Influence
Within a few minutes you can find social media accounts which are dedicated to investments and which will offer all kinds of hot tips on what to buy and when. This can be helpful in discovering new opportunities, but there are clear risks associated with this too. Some people simply shill coins and stock options in order to try and influence the price. Now to those ini the know, they would never ben susceptible to investing based on this kind of guidance. Those however who do not have deep knowledge could easily be sucked in by these accounts and then invest money in things based on info which may not be 100% accurate.
Passion Project
The idea of investing money and making profit from that investment should be as much of a passion as it is an ambition. This is why it is so critical that you know your stuff because the last thing you want is for this to become a chore. The thrill is about making money and it is also about using your brain and a number of factors to pick out an asset, back it and then watch t perform well. There is no use in investing if you are simply going to take someone’s advice and then throw money at it in the hope that something comes off.
Always ensure that you only invest in the things that you know about, and that you get educated on the things which you do not.