Lets say that you have done all the basic, your research plan is done, you know how the investment generates a eturn, the investments is legal and you have done all the homework and ticked all the boxes. The last thing you need to do is test. Spend time watching and testing the investment without using any real money.
Before I invested in the share market, I actually mirrored the market. I followed investment I hypothetically bought shares without using any actual cash. Too many people rush into an investment after reading a book or listening to an expert. Theoretically, if I lose in a investment, I may be able to make it back through another invesmtnt. Therfore my risk tolerance level could be higher than yours. if you risk losing the same amount of money could you afford to lose that money and make it back.
Expert speak from their own high level of isk tolerance. You may not be able to take the same type of isk they are able to. It is best that you test your new found acumen by seeing how well you do in hypothetical situations rather than losing actual cash.
Give youself a time period and see how well you do. When you stop losing and start making decisions that make sense and produce hypothetical wins, then you can enter into the maket with some real money.
This is something we can do with our children as well. Perhaps while they are saving sup cash fo investment, you can mirror the makets together. make theoretical decisions and see if you make or lose money.
Economic cycles go up and down sometimes once every five to seven years, some periods may take longer such as ten years. If you look at the graph above, you will realize that ther is a time for you to go into an investment and buy it and also a time for you to get out an investment and sell.
Fo example, if I buy a property during a recession period and sell it during a boom time I will make money. But heres the trick, we should teach our children not to buy another property straight away, but to hold on to the cash and wait for the next recession to buy again. From the money they have made and saved since the previos cycle, they could actualy buy four propertis, provided they are low end and in good locations, during the next recession as people.with need the cash.