How to Start Investing in Stocks: A Beginner’s Guide;
Let’s say that you have Peso5,000 set aside, and you’re ready to enter the world of investing. Or maybe you don’t. Maybe you only have Peso100 extra a week, and you’d like to get into investing? In this session, Sharon will walk you through getting started as an investor or a Trader and show you how to maximize your returns while minimizing your costs.
KNOW YOUR RISK PROFILE BEFORE JUMPING INTO THE MARKET.
What Kind of Investor or Trader are you?
Before you commit your money, you need to answer the question, what kind of investor are YOU? When opening a brokerage account, a broker like COL or FirstMetroSec will ask you about your investment goals and how much risk you’re willing to take on. Some investors or Trader want to take an active hand in managing their money’s growth, and some prefer to “set it and forget it.” More “traditional” online brokers, like the two mentioned above, allow you to invest in stocks, bonds, index funds and mutual funds.
Learn the Costs of Investing
As economists like to say, there’s no free lunch. Though recently many brokers have been racing to lower or eliminate commissions on trades, and offer index investing to everyone who can trade. All brokers have to make money from their customers one way or another. Look for broker that charges a lesser brokerage fees and provides excellent service & support.
Opening an Account: What Are the Minimums?
Many financial institutions have minimum deposit requirements. In other words, they won’t accept your account application unless you deposit a certain amount of money. Some firms won’t even allow you to open an account with a sum as small as Peso2,000. Some newcomers don’t require minimum deposits, but often they lower other costs, like trading fees and account management fees, if you have a balance above a certain threshold. Be thorough in your examination of the broker and ensure there are no other hidden cost – like retainer and etc.
Reduce Risk with Diversification – Create a Portfolio that withstand market shock and yet have a decent rate of return.
Diversification is considered to be the most important in investing & trading. In a nutshell, by investing in a different sectors and assets, you reduce the risk of one investment’s performance severely hurting the return of your overall investment. You could think of it as financial jargon for “don’t put all of your eggs in one basket.” In terms of diversification, the greatest amount of difficulty in doing this will come from investments in stocks. With a Peso2,000 deposit, it is nearly impossible to have a well-diversified portfolio, so be aware that you may need to invest in one or two companies (at the most) to begin with. This will increase your risk.
There are many more stuffs that as a New Trader need to be aware of…….so start your Journey!!
Will discuss more in our next article; Soon we will be conducting STOCK MARKET CLASSES ACROSS MINDANAO – CALL SHARON @ +639176511344 for APRIL CLASSES…..
Thanks to Investopedia….
High Risk Investment Warning:
Please note that Forex and other leveraged trading involves significant risk of loss, It is not suitable for all traders and you should make sure you understand the risks involved, it is recommended that you seek an independent advice, if necessary.