Around 43% of the people in the world aren’t comfortable with investing in stock market because they are scared of taking risks. But investing conservatively or in a very small amount and keeping your money in cash runs in contrast to the investment advice suggested for the young! It says that in the long term horizon, you will eventually recover from all the losses and surely reap the benefits of growth.
However, if you’re a shy investor or a risk-averse person, then here are some points to keep in mind before investing.
1. Find out all about the different types of investments
If you’re completely new to investments, then it is important to acknowledge the topic first. Read about investments in the basic books and check out the details of the different types of investment online. Find out what is stock, what is bond, what do people mean by investment, how is mutual fund managed etc. With low costs, you will definitely reap high returns. You can also speak to an investment agent to practically deal with the topics.
2. Invest in well-diversified low priced ETF portfolio
When you keep your ETF and index fund cost low, you limit your risks too. With millions of people investing, you aren’t at risk of going bankrupt alone.
3. You don’t have to beat the market, but actually take part in it
When trying to beat the market, investor mal-perform not just in the market but with their investments too because they purchase and sell at lower than the required times. In order to gain in the market, you can create a diversified portfolio across different funds like small cap, mid cap, large cap etc. and invest according to the risk you wish to take.
4. If you wish to invest in stocks, keep a small amount of your portfolio aside and get ready to lose it all
Once you’ve started, you can appoint a fiscal advisor or investment planner who can give you monetary advice which could work best for you. Team up with your planner and determine a percentage that you can safely reach with your investments. No matter what the amount is, it should be achievable.
If you still want to learn, then invest with a small amount of your money and have fun in practicing the ups and downs of investment. People usually set aside 5 to 10% of their money to gamble.
While planners execute every investment deal with great caution, it is advisable that you forecast the risks of the market and plan accordingly. Take the classic examples of previous investors and look out for the investment chart to see the crest and trough of your investment. People without think invest a big amount of their money via credit card in the investment which sometimes backfires. It is not advisable to use all your credit card limit for stocks. Often it leads to the need of credit card consolidation loans. You can easily get these loans from a debt consolidation company.
