Things To Consider Before Investing In Stocks – Lately, investing in stock has become a new trend among young people. Since the end of last year, more and more are vying for stock investment in pursuit of money.
Before you follow this trend, there are important things that you need to note. Now, investing is made easier, especially since the advent of various digital platforms that allow transactions to be done online from anywhere and anytime.
No need to go all the way and queue at a bank or securities company to create an account. Investment can now be made by anyone, including students, because it can start from a very small nominal. No wonder more Millennials and even Gen Z are flocking to this hype.
Things To Consider Before Investing In Stocks
Know the risk profile
A risk profile is a person’s level of tolerance to risk. There are already many websites that provide short quizzes to recognize this risk profile. You can browse first.
What is clear is that when our risk profile is conservative or difficult to accept high risk, there is no need to impose self-investing stocks. However, the investment is as comfortable as it is, do not just follow the trend and then be excited and not calm.
Investment objectives is one of Things To Consider Before Investing In Stocks.
Due to high risk, stock investment is suitable for long-term goals above 5 years. Also realize first, whether you want to be an investor or a trader? Because those two things are obviously different.
The investor invests his money for a specific purpose so that it will leave his stocks for several years. While traders only buy stocks for profit, they usually have no financial purpose.
Know Your Purpose
Before you begin, of course, you must know first what the purpose of investing. Whether it’s a long-term goal (e.g. A pension fund, a S2/S3 education fund later), or a short term (such as a vacation, buying a gadget or a new vehicle).
Whatever the purpose is legitimate, as long as it is not because of the FOMO (Fear of Missing Out) or follow-up because it is trending among friends. The problem is, a lot of people invest in stocks, just because they want to be cool, or so they can show off on social media only. Do not also invest because you want to get rich quickly, investment is not suitable for greedy people.
Target achievement is the next Things To Consider Before Investing In Stocks.
Once you know your goal of investing in stocks, set the targets you want to achieve when buying stocks on the capital market. Achieving the target here means that you must already know how much funds you want to achieve as a return. Surely you expect the stocks you buy to increase in price so that you can reap the most profit. Target achievement needs to be done so that your investment is more targeted.
There are two types of investors, namely short-term investors and long-term investors. Short-term investors usually only pay attention to when to buy and sell stocks. Meanwhile, long-term investors pay attention to what stocks will be bought or sold, as well as at what price they will buy or sell the stocks.
If you want to start investing in stocks, be a long-term investor. The name is also stock investment, the result will be more pronounced when you set a long term than a short term.
Get to Know Various Investment Instruments
Investment instruments are not just stocks, you know. There are many instruments to choose from, such as gold, money market mutual funds, P2P lending, index mutual funds, and stock mutual funds. Each instrument has its own advantages and disadvantages. Some have relatively low and long return rates, some are high and fast.
Some are stable, and some are fluctuating. But keep in mind, the higher the return, the higher the risk. You can’t choose one investment instrument just because the potential is high (such as stocks). The selection of instruments must also be in accordance with the objectives and period of investment.