Perhaps one of the things that make you want to plunge into the investment world is the lure of passive income that can soar multiple times with less capital. Yes, many people have proved that stocks can bring huge profits when it is managed well. But what should be emphasized here is “when it is managed well”. It is important to prepare everything well and have a deeper understanding of managing good stocks, especially for beginners. So this article will discuss some things that must be known by newbie investors.
The most frequently asked question by beginners is how much money they have to invest. Actually, there are no specific rules for it. But many people use the dependable guideline to discover their portfolio percentage by take their age and subtract it from 110. After that, you can make your own portfolio to diversify your asset. Things to consider here are about the company profile and your risk profile.
As a beginner, try to invest in a field which you already know well or at least in an industry that is easy for you to understand. It is not advisable to buy shares in one sector only because by buying some stocks in different industries can also diversify the portfolio properly. After that, you can learn their financial statements to convince yourself that the company is always generating profits and not having too much debt. Another thing that you have to do to avoid the excessive risk as newbie investors are not to invest in a company who is having a bad case and in the process of investigation.
Now you can decide wisely on which company that you will invest and don’t forget to adjust this based on your risk profile. It is important to know your own profile because it will provide a description of whether you match the potential risks of an investment product or not. So, take the risk and enjoy the perquisite!
Rizky Nurul Majid