5. Don’t chase tips
The internet and media are full of punditry on shares or funds that are about to be the next best thing. Although these ‘tips’ can sometimes be insightful, be careful not to chase them and constantly change your portfolio to take advantage of them by picking suitable investments to add to your portfolio.
6. Invest don’t speculate
One of the most influential investors of history, Warren Buffet said “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price”. Though penny shares with their perceived potential for high returns through “cancer cures” or “prospective oil field” can be very enticing, you need to consider what the long term future value of the company is. Very small companies can be riskier purely due to the fact they may be less well regulated than the larger, multinational corporations. It’s false to think that taking increased risk guarantees you more money, you wouldn’t bet on a pony in a horse race.