Investing is, at its heart, a fairly simple activity. Simple isn’t the same as easy, of course. To succeed as an investor takes work, diligence and practice. But the basic rules for success are not complicated. By continually checking that you are following them, you can significantly increase your chances of earning enough money to achieve some degree of financial security.

One important principle is to remain alert to the latest financial news and to be open to new ideas. You can stay up to date by finding a reliable investment site that offers share tips and hints as well as ideas and motivational tips. Sometimes even just talking with fellow investors can help you to stay focused and positive. Beyond that, though, there are some basic rules that are a vital part of successfully managing any investment portfolio.

Safety margins

It is important to ensure that you always have a margin of safety in your investments. This is largely achieved when first purchasing a stock, but it is something that you can periodically monitor. The best way to ensure a safety margin is to be conservative. When looking at the potential growth of an investment, err on the side of caution. Don’t end up holding mediocre stocks that you paid too much for because of an overly-optimistic assessment of growth.

Minimise costs

There is one important principle to bear in mind when holding investments. The first is that the more often you trade, the higher your costs will be. Every trade you make incurs commission, fees and taxes, so avoid frequently dipping into and out of investments. In the long-term, the costs can add up to make a significant impact on your profits.

Focus on performance not stock price

One of the biggest mistakes that people make when managing their investments is to focus on the stock price. The current market price of a particular asset may go up or down, but in the long-term, it will simply follow the basic cash-generating performance of the asset itself.

Back in the 1970s, the financial crash persuaded many people in the US to sell perfectly good assets simply because the stock price had plummeted. Yet most of those assets, including banks, pharmaceutical companies, hotels and manufacturers were continuing to make a profit and those who held on to their stocks enjoyed considerable compound interest over the next few years. The lesson here is to ignore stock price and focus on the asset itself.

Regular reviews

While you should always lean towards holding investments for the longer term rather than frequently trading them, an important part of investment management is to regularly review your portfolio. Make sure that your investments are performing in line with expectations, monitor your risk exposure and make any necessary adjustments.


Too many investors place their emphasis on the business of buying and selling, but the key to successful investment is in the long-term. By managing your investments consistently, and following these tips, you can increase your chances of turning your investment portfolio into a very profitable venture.