Investing can be a lucrative hobby that helps you reach your financial goals. Who knows? You might even master this game, but it is more about instincts and research. If you want to give investing a shot, you need to start on the right foot. So the question is? How to start investing safely and profitably?
Many people start investing without giving the whole thing much thought, and they suffer significant financial losses. It’s easy to get discouraged if you make a mistake when you’re just starting because the fear might come in the way of future investments.
We’ll offer you some advice for beginners that will let you create a good foundation as an investor and improve in the future.
Start Early On
There’s no “perfect” moment to start investing. Yes, you can learn a lot online, read about it, watch videos, buy books, and sign up for investment courses, but hands-on experience is all that matters. So, the clues experts suggest are not correct at all times.
At the same time, be sure to understand that you will likely lose some investments, which is part of the game. Investment is all about the long-term results and looking at the whole picture, not a single move you’ve made.
Start right away and expect your first investment to go down. If it doesn’t, great – but if it does, the important thing is to learn from it and understand that you will have to lose from time to time. Even some of the most successful investors have suffered heavy losses.
Start With A Small Amount First
Investing or trading a small amount every month is a great way to get started. Some brokers allow you to start with as little as $5.
Regular investing will help get a good feel of the highs and lows of the market, how different instruments behave, and what should the expectations be.
You can invest a lump sum, too, if you have some cash savings you want to put to work in the stock or forex market, for example, but this is a higher risk strategy as you might be exposed to greater risk.
Make Sure You Determine Your Goals
People invest for a variety of reasons. Some want to have more money during their retirement, others want to buy a car or a home, some simply want to have a more expensive lifestyle, etc.
If you have clear objectives, you’ll have an easier time deciding where to invest, how much, and how long. People looking for secured investments usually go with life insurance. On the other hand, some investors love having a fixed rate of return, and they choose fixed deposit investments.
Sit down and think about the future and your investment goals. Once you’ve made that clear, it will be easy to find the proper investment method.
Do Proper Research
You should start right away, but this doesn’t mean you need to do it blindly. Research is a part of the investment, and you need to learn about the market you’re interested in and the products and companies involved.
For example, if you plan on investing in stocks, you need to learn about the companies, their performance, estimated growth, ratios, etc. Research lets you see different investment opportunities and all the risk factors involved.
Research increases your chances of earning, and it also reduces potential losses. Over time, research helps you get valuable experience and knowledge to make decisions.
How To Start Investing Safely
Many people today invest online because it’s convenient and easy. You will have to get acquainted with different investment apps to make your job easier. These tools and services have their own specific liabilities in terms of security.
You will have to pay attention to security more than you usually do because you don’t want your personal information or assets stolen.
- First, adjust your approach, avoid clicking on suspicious links, messages, and emails, and try to use the internet safely.
- Secondly, use different security tools to protect your information, including reliable VPN services, antivirus tools, two-factor authentication, password managers, etc. A Virtual Private Network is one of the ways to guarantee that your connection is secure and that no one can intercept data exchanged online. A VPN download can also mean that you can access more resources about foreign investment opportunities.
What Is A VPN?
VPN stands for Virtual Private Network. Using a VPN is an easy and efficient way to increase your online safety, privacy, and freedom.
When you’re using the internet or trying to access a trading platform, there is a constant process of your device exchanging data with other parties on the web. A VPN creates a secure tunnel between your device (e.g. smartphone or laptop) and the internet, or trading provider. The VPN allows you to send your data via an encrypted, secure connection to an external server: the VPN server. From there, your data will be sent onward to its destination on the internet.
Rerouting your internet traffic through a VPN server has several advantages. First, it helps you hide your identity online. Second, it secures your data. And third, it allows you to use the internet more freely.
Using a VPN can guarantee safe trading and minimal risk of being hacked or risk losing any funds due to malicious activity.
Learn To Deal With Your Emotions
We’re all emotional beings, and sometimes, our emotions can lead to poor judgment. As an aspiring investor, you need to deal with your feelings. For example, if you lose on investment and start feeling bad about yourself, you might get discouraged about future moves.
Many people get excited when they earn a profit and start making less-informed decisions that collapse. Always focus on numbers and facts, and don’t make emotional decisions.
How Much Risk Can You Handle?
The amount of risk an investment has is crucial in making decisions. Carefully consider where you want to invest your money and compare different investment opportunities.
See where you stand and how much risk you’re willing to take. You don’t want to invest with a level of risk you aren’t comfortable with and put yourself under a lot of stress. Always invest what you are willing and able to lose.
How much should a beginner investor start with?
“If you’re a typical working person or a beginning investor, you should know that it doesn’t take a lot of money to start,” IBD founder William O’Neil wrote in “How to Make Money in Stocks.”
“You can begin with as little as $500 to $1,000 and add to it as you earn and save more money,” he wrote.
These are the basics you need to know as a beginner so take the time to learn more about investing and start slow. You don’t have to put all the money you’ve set aside right away. Get some experience and know-how things work.