The document provides tips for how to be a better investor and achieve financial freedom. It recommends that instead of just saving money, one should invest in stocks which have historically earned around 10% annually over the long run. The best time to invest in stocks is any time, as trying to time the market is difficult. It also advises investors to ignore short term fluctuations in their portfolio and not sell low and buy high based on daily price movements. Excessive trading should also be avoided as it can erode a portfolio through taxes and selling at a loss.

1. BeaBetterInvestor
How to
Etienne Kiss-Borlase

2. Financial
Freedom
Achieving a high level of financial freedom will
involve more than making money. It will also
require more than saving money under a
mattress or in a savings account. The best way
for a person to increase their level of financial
independence is through investing. However,
the average American doesn’t do all that well
this process. Here are some tips to be a better
investor.

3. Put Money Into
Stocks
As noted above, just socking money away in a
savings account will not get the job done. This
strategy will do well to keep up with the rate of
inflation. In a situation like that which prevailed
for several years after the Great Recession,
savings will earn basically nothing. To become
a successful investor, it’s important to
remember that stocks are the best way to truly
see growth over time. It’s commonly argued
that stocks will return 10 percent yearly over the
long run on average. History shows that this is a
pretty accurate statement. The best time to put
money into stocks is pretty much any time.
Attempting to time the market is a fool’s errand.

4. Ignore Your
Portfolio
This might be taking the argument a bit far, but paying too much attention to the ups
and downs of the market will frequently lead to bad decisions. In other words, don’t
stare at the screen watching the momentary gyrations of the stocks or funds. Those
who focus on daily movements are more likely to sell low and buy high. Some trend
charts that deal with moving averages and head-and-shoulder patterns will also lead to
a similar temptation. Fear caused people to sell near the bottom of the crash that was
tied to the Great Recession. Instead, this was a once-in-a-decade opportunity to buy
near the bottom.

5. Avoid Excessive Trading
Trades are taxable events. A good analogy of the way incessant trading can
affect a portfolio is a bar of soap. The bar has an important role to play, but the
more it gets handled, the less soap is available to do the job. Selling at the
bottom and paying taxes on capital gains can cause a portfolio to wear away.
Of course, it can be a good idea to sell if a company’s underlying
fundamentals have changed, but this step should not be taken at a moment’s
notice and without forethought.