I read an article today on Fool.com that discussed finding your “investing edge”. It makes good sense. With anyone in any profession they need to focus on one thing to put them ahead of the competition. They mentioned Dennis Rodman who was an excellent basketball rebounder in his day. He wasn’t a great shooter, or defender, or dribbler even; but he WAS good at one thing, rebounding. And that was enough to put him at the top of his game throughout his career.
This logic makes sense in any activity at all though – if you daytrade all day for 5 years, I guarantee you’ll be better than 99% of the rest of the world at it; granted you’ll have to turn a profit at some point. But take something basic and in a niche like municipal bonds. Yea, they’re not very exciting, but I’d bet that if you researched and studied them for years, you’re going to be very good at it come 10 years.
As anyone that is reading this now, they’re clearly interested in their financial futures, but sitting around and thinking about getting into mutual funds or expanding your 401k, or starting a ROTH IRA isn’t going to just happen out of the blue. Yes, you can probably muddle your way through it, but you’re going to get some bumps and bruises along the way if you don’t do your research on each of them. If you’re investing in it, KNOW about it first, don’t go in blind. Learn about the funds in your 401k and compare them to other 401k plans out there – are they on target for your goals?
If you’re looking to invest in an IRA, know the different types of IRAs. Maybe you can contribute to a SEP IRA and cut your taxes, or a SD-IRA invested in pretty much anything. Maybe this could add some pop to your current Traditional or ROTH IRA setup -
Learn what you’re getting into before jumping into it or you’re going to find yourself making a lot of the same mistakes I’ve made. Granted, I’ve learned a good amount from them, but they’ve cost me in my portfolio. Find your investing niche, be good at it, become the best in the business at it and experience alone will put you well ahead of the crowd…