I started researching investing at the age of 15 and started building an investment portfolio the year I entered university. During my university years, I learned how to manage my investments without compromising my studies. Based on this experience, I offer five tips to help student investors make the most of their college years and investments.

1. Ask Yourself Why You Want to Become an Investor

Before moving on to how to invest, it’s important to think about why you want to invest. Contrary to what popular culture would have us believe, achieving success long term Investment success requires patience, hard work, time and psychological discipline. You’re only in college for a few years, and performing well academically takes serious effort. Ask yourself if investing your limited time and energy is the right decision for you. Compare this to other major commitments you might pursue, such as completing a second major, learning a foreign language, working for a professor, finishing a college degree, etc. internshipsor getting involved in athletic and community groups. While it’s possible to do most of these things in addition to your investments and college education, there are limits to the commitments you can realistically pursue.

Different investors They have different motivations. I know an investor whose goal is to finance the education of 1000 children. Others are motivated by simpler goals, such as the desire to create financial wealth for themselves and their families. My long-term goal is to develop a philanthropic fund to support critical services in my hometown of Vancouver. Whatever your goals, having a strong understanding of why you want to become an investor will contribute to your long-term resilience and success.

in times financial crisisIt may be tempting to sell your investments at unusually low prices to avoid further losses. Similarly, during periods of persistently rising yields, it may be difficult to avoid purchasing overpriced securities whose prices continue to rise. seriously consider why What you want to invest in will encourage you to diligently stick to your goals. investment strategy in good and bad times.

2. Pay Attention to Investor Psychology

As investors, our mental habits can be our greatest ally or our greatest enemy. As mentioned above, many investors are attracted to investment. buy high sell low– a recipe for financial disaster. This temptation often combined with social pressures. As investors, it is inevitable that we will experience self-doubt and the fear that we will miss out on the returns of other investors. But this tendency must be resisted in order to avoid the temptation of the search. short term gains.

University can be a particularly challenging environment in this regard. At my university’s orientation day for new students, the student body president gave a speech encouraging students to approach their college years with a healthy dose of FOMO — fear of missing out. Even then it occurred to me that this was terrible advice for investors.

One of the best ways to prevent yourself from making bad investment decisions is to educate yourself about the nature of investor psychology. Two of my favorite books on this subject are “Animal Spirits” by Nobel Prize-winning economists. George A. Akerlof and “Your Money and Your Brain” by Robert J. Shiller and Jason Zweig. Studying these books will help strengthen your understanding of the profound role psychology plays in both your own decision-making process and your life. financial markets as a whole. Understanding the psychological aspect of investing will help you avoid irrational investment decisions.

3. Adopt a Realistic Strategy Based on Your Schedule

Conducting a comprehensive study investment analysis It requires a significant amount of focus and time. As a student, it’s unlikely you’ll have time to dive deeper into your research. It makes sense, then, to adopt a strategy that you can realistically implement in your limited free time.

Perhaps the simplest strategy consists of investing regularly. portfolio related to diversified mutual funds Such as index funds, exchange-traded funds (ETFs), or mutual funds. This approach can be advantageous for investors who are less interested in doing in-depth analysis of individual investments and prefer to delegate the more laborious aspects of investing to a third party. On the other hand, investors who want to keep their funds actively managed will have to pay for the service in higher shape management fees.

Full-time students who want to manage their own portfolios will need a time-efficient investment strategy. I chose to build my portfolio primarily based on businesses that were underpriced. liquidation value. I chose this strategy because it was more convenient. quantitative analysis and monitoring. For example, I created a standard investment checklist to screen investment candidates. The checklist determined the exact prices at which I would buy and sell shares of the business. I then set up automatic alerts using services like IFTTT to notify me when shares reach set price thresholds. Thanks to this strategy, I was able to gain real-world investment experience without compromising my studies.

A third option for students who want hands-on investing experience but don’t have the money is to invest using online simulators such as: Investopedia’s Stock Simulator. Simulators are a great way for investors to test new ideas without the risk of exposing real capital.

4. Invest in Your Knowledge

If you don’t have the time or resources to invest in your college years, it’s worth remembering that the best investment you can make is improving your own knowledge. This principle applies equally to students who have the time and resources to invest.

Depending on your choice of major, you may find that your college education directly contributes to your career. investment education. Others may need creative ways to find overlap between their training as investors and their college curriculum. My chosen major—the history honors, which focuses on the history of science—does not have a direct relationship to investing. However, I found that many of the skills I developed, such as fundamental research, writing, and critical thinking, had clear applications in investment research and analysis.

Regardless of your chosen field of study, if you take a proactive approach to your investment education, many industry professionals will be open to answering your questions and supporting you in your development as an investor. I strongly encourage all student investors to attend networking events and reach out to industry professionals.

Another way to improve your investment knowledge is to learn from the world’s greatest investors. I chose to base my knowledge on the value investing methodology developed by . Warren Buffett mentor, benjamin graham. I recommend Benjamin Graham’s book “The Intelligent Investor”. Another classic is “Security Analysis”, which Graham wrote with David Dodd in 1934. value investing I highly recommend reviewing Warren Buffett’s letters to shareholders, as they have evolved since Graham’s time. holding company, Berkshire Hathaway (BRK-A, BRK-B). The letters explain how Buffett applies and expands Graham’s value investing principles. These letters are especially helpful because Buffett acknowledges his mistakes and reflects on them. Taken together, Buffett’s letters to shareholders and Graham and Dodd’s classic texts provide a comprehensive introduction to the theoretical foundations and practical applications of value investing.

5. Make Good Friends

One of the biggest advantages of being a student is the opportunity to connect with a wide variety of people on campus. In my experience, a network of colleagues to discuss investing with has been instrumental in developing a more nuanced investment decision-making process. The important thing is to find individuals who are both interested in discussing investing and willing to engage in constructive discussions.

Of course, this is easier said than done. To build this network, I had to be open about my passion for investing. It took me until my junior year of college to overcome my obstacles and create an investment website where I shared my thoughts on investing. I was surprised to find that many people I never thought would be interested in investing approached me with questions and feedback about my work. For the first time, I began to build a network of peers with whom I could discuss. investment ideas.

The long-term value of such communities cannot be overstated. It’s also important to keep in mind that people tend to emphasize their own investment successes while hiding or downplaying their mistakes. Therefore, it is wise to approach investment discussions with a healthy skepticism.

In conclusion

Learning to invest in college is challenging. Students who approach this challenge with a clear sense of purpose, a realistic investment strategy, and a determination to learn from the best can use their college years to build a strong foundation for their investment future. Who knows? One day, students may be examining your investment philosophy.