Make your money work for you.

A well known saying from Noel Whittaker " Life is full of uncertainties. Future investment earnings, interest and inflation rates are not known to anybody. However, one thing is for sure, that those who put as investment program in place will have a lot more money when they come to retire than those who never get around to it."

Most of the people think that investing money is a difficult and expensive process which is not. The problematic area is that we do not do it well. Let me point out some of the reasons that cause an investors to hesitate:-

• Market Timing - Market timing is the strategy of making buy or sell decisions of financial assets (Stocks) by attempting to predict future market price movements. The prediction may be based on an outlook of market or economic conditions resulting from technical or fundamental analysis. A lot of investors believe that there is a right time and wrong time to invest in stocks and that is possible for most of us to predict that time. Which is absolutely wrong way of investment because stock prices do not always move on the same logic. An expected event which happen day by day usually move the stock prices up or down. Which can not be predicted by charts. Best example : in late 90s when stock of IT companies boom what happened at that time when investors in the excitement, intentionally or not became the market timers. Timing in these scenario can be risky.
• Buying High and Selling low - It violates the most of fundamental element of investing still many investors practice it every day. This is the one main reasons of failing to time the market correctly, and it most often results investor to chase for hot stocks and as soon as those sectors or stocks start losing their ground they sell and go looking for another hot stock. Again  investor pick new stock with gains to invest in and investor is again confident that he is back on the fast track to riches which is not in actual. All the instruments they purchase have proven track records bit yield him a below average returns. he is from one of those investors who make emotional decisions, tries to time the market and lose his sight on his own long-term investment objective.

In all the over hassle investor forget about  rules of investment. Here are rules for investment success-

• Diversify - It is very important for an investor that he do not pull all his money in one sector. As the economy expands and slows, money has a tendency to flow back and forth equities and fixed income instruments. Inside these 2 markets lies a selection of sectors which also expand and slow with differing rates. Because of this timing of market get more absurd since you have to time the smaller sectors against the broader sectors. Solution to this problem is to diversify your portfolio. Diversification reduces the unsystematic risk which is company specific. However, the risk which is affect the economy cannot be reduced by it. It is a strategy of investing in a portfolio of securities so that the losses from one will be offset against gains in others.
• Ignore the hot stocks - If you buy this year's top-performing stock, be prepared to see at the bottom next year. The fancy academic expression for this is - reversion to the mean. Even their is the old saying that - What goes up must come down. So, better to chose stocks carefully.
• Invest regularly for cost average - Cost averaging is the systematic purchase of investment instrument over a time. By buying an equal amount each period, you should end up with a cost basis and is surest way to reduce the risk of investing. It is valuable in volatile markets where dramatic swings are experienced and no one is smart enough to anticipate all the moves, both up and down.
• Be a disciplined investor-  After you have chosen some stocks, stick with them. Don't be afraid to go against the tide, as often the unpopular groups tend to outperform in subsequent years. although market moves based on economy, it can also swing wildly based on psychological reasons such as political turmoil, rumors about interest rates or other world news. If the fundamentals of the economy matches your overall portfolio objectives then you should stay with that.