You don’t have to be a financial planner to try investing. Although it would greatly help to consult with one, your passion to learn this trade is usually enough to get started. Investing is necessary if you are eyeing for financial security especially in your retirement years. Cash sitting in the bank will get eaten up by inflation given a few years. Investing regularly and efficiently can help you lead a more comfortable life even without winning the lottery.
Know the basics first
Arm yourself with good, starter information before making any investment. Get a good grasp of the stock market and the individual securities. Find time to learn definitions and calculations behind various financial metrics like ROE or return on equity and EPS or earnings per share. Likewise, see to it that you can at least differentiate between market order types and investment accounts. Depending on your background, these may sound alien or familiar. Reading books or articles about it can help you immensely but if you still find yourself lost in these terminologies, don’t give up. A consultation or two with a skilled financial planner is usually enough to ease you through investing.
Don’t put all eggs in one basket
The eggs in one basket saying must have originated from investors because indeed, you are encouraged to diversify your investments especially when you are new to investing.
Set your goals
Determine your purpose prior to investing. Of course, you want to make money but for what? Is it for college fund, retirement, starting a business? When do you need your money back? Do you need after a year or in six months? These factors can help you decide where to put your money eventually and sometimes it could mean that it’s not for investing. Keep in mind that the stock market is popular for being volatile so you may have to wait to get your funds back. Soon as you decide investing is right for you, determine your risk tolerance. You’ll realize that there is a lot of emotions connected with investing so if you are comfortable with taking risks, you may want to try a more conservative approach and start with small amount.