If you are a newbie in the investing world or if you are only considering investing there are 10 things you need to know. These 10 things I wish someone would have told me before all the emotional roller coster and lost money.
First thing is that no matter what investing you are doing it is always a gamble and you are taking a full risk with your money unless you can predict the future. And if you can predict the future hit me up because your ability would be very helpful. Back to the topic if you allow.
Investing is a gamble because instead of putting your money in saving accounts or security of guaranteed returns, you’re taking a risk with your money to see if you can have somehow high or better return in the future.
There will always be risk when it comes to investing but it is up to you if you want to increase or decrease your risk. You can increase your risk with just rolling a dice and investing your money in random companies without any research which I don’t recommend. To decrease your risk all you have to do is spend maybe couple of hours doing some research and reading some financial statements from the companies you are considering to invest in. Which I do recommend doing.There are a lots of very good companies out there but there are also lots of companies which aren’t so good. And the best way to decrees the risk is to know which companies are the good companies and which companies are the bad ones.
Do your research always before investing in new companies, thats just a must if you want to not lose money or not so much money as you could with the bad companies.
Second thing is that the stock market is basically like a store where you sell and buy stocks.
Without the stock market there wouldn’t be no stocks or funds because funds are many stocks put together into one transaction if you didn’t know that.
So the thing which you gotta know here, is that you should try to beat the market or fight it. Because you will never be able to do it, if you try to do it all which will happen is you losing your money. So the clue here is that the best way to earn money through investing is to learn about stock market, understand it, play its game and stay at the top of investing on regular bases as you can.
The third thing is the five golden rules of investing. Yeah it is a real thing, I learned about it actually last month. So let me tell you what the “five golden rules of investing” are.
Five golden rules of investing are
1. The greater return you want, the more risk you’ll usually have to accept.
2. Don’t put all your cash into one field. Spread it in as many fields as you possible can. If you can’t then save money and then invest.
3. If you’re saving over the short term, it’s much wise to not take too much of the same risk as the long term investors take
4. Review your portfolio on the regular bases
5. Don’t panic when stocks go down
The fourth thing here is that the one which is responsible to make decisions with your investments and money is only YOU. Not the experts on the TV nor you’re friends or family.
Before you buy stock or a fund always ask yourself Why do you put your money in that stock / fund ? Do you have the faith that company / fund?
Always be careful when you invest and don’t invest only because that fund or stock is trending or because an expert on TV have said that this stock will do very well in the future. When it comes to investing always use your own brain, opinions and some googling before you do your investing.
The fifth thing is that never invest more than you can afford to lose. Never do that. The reason behind this is that no one can see the future and even the greatest stocks can take a dive in prices just as Tesla stocks did not so long ago.
I would recommend you, to not invest more than 20% of your monthly income. You can gain a lot if the stocks go up and if they go down you won’t loss that much as you could have if you invested more than 20%.
The sixth thing is that a stock is a very small piece of a company. If you didn’t know the stock / share is a divided-up unit of the value of a company.
It really blow my mind when I learned that. But that piece you buy is in the end nothing when it comes to the CEO or staff at that company. Because you are only a person a dozens other people who also have their stocks.
The seventh thing is that buying stocks on platforms like Robinhood are the cheapest way to buy stocks.
There are many different places where you can buy or sell a stock from. All the way from Wall street to an illegal place on the internet. But the cheapest place where you can buy and sell stocks are on websites like eToro and Robinhood.
The eight thing is that funds are basically a lots of different stocks put together in a one place.
So if you cant decide what stocks you want to buy in a field than funds is the best way out for you. Funds can invest in almost anything like countries, energy, gold, oil, even debt
The ninth thing is always do your research. No matter what, before investing even a single cent do your research.
Research can save you a lots of money, trust me on this one. I lost cash not doing it during my first month investing.