There are so many instances where I hear people wanting to invest in the stock market. However, they also fear that they might not be doing the right things to earn the best profits.
That is usually what novices in the field always think about. But do not worry, although it can be daunting due to a number of factors, the stock market is actually easy to understand, provided that you want to gain more knowledge about it, that is.
Read further so that you can find the information that is best suited for beginners in the stock market to be part of the best brokerage firm in malaysia.
There are actually two investment types that you need to know about: direct and indirect. A Direct investment is actually owning a particular share from a specific company. An Indirect investment is where you do not buy shares from specific companies. Instead, you’re buying them from an open-ended fund.
The difference between the two is that in the direct approach, you will find a stockbroker and they will help you get started by buying shares directly from the companies.
In the indirect approach, it is much safer for beginners since the money you’ve invested will be hedged against any external factors such as inflation and economic downturns.
2.Day Trading Should Be Left for the Professionals
The term Day Trading is where traders and investors buy stocks on the same trading day, usually based on the fluctuations or movement in the stock market.
The reason why day trading should be left for the professionals is that there is just too much work involved that can easily overwhelm novice traders.
For you to earn big bucks when day trading, you have to keep a close eye on the stocks and immediately buy shares if you see the prices plummet.
The challenge here is that you are not the only who is going to look at the shares because there are millions of investors in the stock market.
You can try your hand on day trading only if you have enough experience and only if you are willing to risk some of your stocks in the process.
3.How Long Are You Planning to Invest?
Longer term investments or those shares that are bought today and allowed to stay in your portfolio for a much longer time is actually the best way to earn money for beginners.
This is also a great way for you to assess the risks involved and so that you can see how the stock market moves, especially when it comes to the share prices. Remember, the market is so volatile that any change can happen in an instant.
4.Are You Bold or Cautious?
The premise of the share market is that if you are bold and daring, you could possibly earn more than the cautious investor. But do note that you can also lose a lot as well.
Cautious traders are reluctant to trade and they will just hold on to their shares until such time that the market is favorable to them. This approach gives you a steady income stream through dividend payments, but you will not earn as much money as the more daring people.