5 Things to consider before: Investing
The attraction of investing in shares
in the stock market is the chance of making some quick
money; good returns over the short term. Here are some tips on how to
approach the market wisely, and make an informed decision:
Do your research.
If you are a first time investor, make
sure you research the market thoroughly. What is the stock market,
and how does it work? What is the difference between securities
and private trading? Basic knowledge of the stock market can
save – and make – you money.
Calculate your risk.
“Buy low, sell high” is much easier
said than done; investing in the stock market can be risky, and it’s
worth your while to carefully calculate the risk involved before you
plan to invest.
Choose the right company.
Basic knowledge of the stock market is
only the first weapon in your arsenal. It is a good idea to do
background research on the companies whose stock you’re planning to
invest in as well. Knowledge is power, and it will pay off to be as
informed as possible.
Ignore market rumours.
You’ll never run out of sources for
free advice, whether it’s from magazines, veteran investors, or
self proclaimed “experts”. It’s a good idea to not accept these
“sure thing” shortcuts; putting in the work to do your own
research will definitely pay off in the long run.
Don’t put all your eggs in one
By diversifying your portfolio, you’re
spreading out your assets and minimising your risk. To invest heavily
in one company in an all-or-nothing bid can sometimes work in your
favour, but can just as easily lead to you losing your hard earned