Investing in the Share Market
So, you’re finally going to invest your money in the stock market, but you do not know what to do. Well, it is actually quite easy and in this article, I will go over everything that you need to know to start investing in the share market before you open stock account in Malaysia.
Things to Do First
In order for you to start investing, here are a couple of things you have to do:
- Sign up for a Dematerialized (Demat) Account
- Get a trading software and have it installed on your computer
- A reliable internet connection
- A calculation of your assets (only invest the surplus/excess)
- Pay your debts
- Pay your taxes and other obligations
With all of those out of the way, how will I make sure that I get the best possible results? Here are some tips:
1. Humble Starts
Think about all of the rich entrepreneurs that had humble beginnings. That is also the mindset that you have to have when you start investing your money.
You have to have a humble beginning in that you should invest only a small portion of your assets just to test the waters. Once you get the hang of it, you can then proceed to make bigger trades.
2. Invest in Different Fields
One of the tried and tested methods of staying afloat in the stock market is to diversify your stock portfolio. What I mean by this is that you have to buy stocks from different industries, so in the event that one fails, you still have some shares left.
An example of diversification is buying a stock from the automotive industry while also investing in some stocks in the food industry. Remember, buying shares from different shareholders in the same industry is not part of diversification.
3. Go for Blue-Chip Stocks
You want your money to be safe, especially when you’re still new to share investments. One way to earn guaranteed profits is by investing in blue-chip stocks.
This type of stock is where you buy some shares from a reputable and well-established company. It is safe because they’ve been there for so many years and their stocks are in the billions, which means that you are guaranteed some profits, albeit not that big compared to investing in other places.
Still, this is a good place to start and it can really hone your ability to earn profits. Once you’ve mastered the art, you can then start putting your money on other investments.
4. Never Follow the Crowd
We, humans, are herd people in the sense that we usually follow the crowd wherever they go. This is not a good thing to do when investing your money in the share market.
Blindly following the crowd and not doing your analysis is a bad thing because they might earn some profits, but they might also lose it because they didn’t do their homework.
Do some technical analysis, find some stocks that you think are going to be good investments based on your research, and go from there.
5. Gradually Increase Your Investments
To really earn a lot of money in stock market trading, you need to gradually increase your investments.
To do this, you have to make investments regularly to ensure that you’re going to get some good trades in the process.
You can hold on to some of your stocks and enjoy dividends and compound interest, or you can sell them for more profits.