If you’ve ever been curious about investing and didn’t know where to start, you’ve likely pondered a variety of questions from what types of stocks to buy to how much money to invest to who to ask to guide you along the way.
Though it may seem complicated, investing doesn’t have to be difficult at all. Investing your money is critical to reaching your savings goals. With an experienced and trusted financial advisor by your side, investing can be an exciting and smooth process. To help give you some confidence when it comes to investing, here are our team’s suggested do’s and don’ts for investing beginners.
WHEN IT COMES TO INVESTING, DO…
1. EDUCATE YOURSELF.
You won’t likely make money from stocks if you don’t take the time to research a company before investing. Study a company’s core values, financial statements, and management, as well as any other beneficial information that gives insight into its investment potential. Even more, don’t go it alone. Choose a financial advisor to guide you in the process, and also make sure he or she has adequate experience and knowledge about investing.
2. DIVERSIFY YOUR PORTFOLIO.
New investors might be surprised to know that it’s better to own more investments than less. A diversified portfolio should not only be varied in its number of investments but also in types of investments. In the event that one or two of your stocks begin performing poorly, it may not affect your entire portfolio greatly. This is just one reason why your stock portfolio should be sufficiently diversified.
3. INVEST FOR THE LONG-TERM.
It’s true that many investors who have become wealthy from stocks are long-term investors. Long-term investing is more stress-free and gives investments time to make a greater impact. Investing for the long-term can help you avoid paying numerous fees to your broker for opening numerous trades. Also, thanks to compound interest, you can earn more over the life of your investments by investing less now than a larger amount later.
DON’T DO THESE THINGS WHEN INVESTING…
1. Don’t buy the old market story of ‘buy and hold’ which has become ‘hold and pray’
2. Don’t get the ride before you know how wild it can be Be smart with your inheritance.
3. Never invest blindly without a true plan.
4. Don’t try to catch up by raising the risk level.
5. Don’t fince your child’s education with retirement savings.
Never give your precious money to an unknown person who just got into the business.
- Check the credentials of the company before investing your money.
- Personally visit the office of such financial firms and speak to the employees, find out more about the company and its owner.
- Be cautious if anyone is offering extraordinary returns.
- Ask the company how they would be able to furnish such huge returns on investment.
- Keep a check whether the company is following the guidelines of RBI and SEBI or not.
If anyone is promising higher returns that those offered by the nationalized banks then tread with caution.
- Continue your investments according to your financial goals.
- Invest through SIP and increase its percentage whenever you have disposable income.
- Do not try to time the market.
- Don’t be sentimental in taking investment decisions, be logical.
Investors should talk to the advisors and educate themselves; if they do so, they will never make impulsive decision.
- Investors should not go after products which promise huge returns in a short time.
- Do not ignore inflation while planning for long term goals as it will result in erosion of capital.
- Never ignore one goal in life – retirement planning.
