How do I get started with investing?

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Posted by Siddhant Chawla (MONEY FORUMS: 2, Answers: 0)
Asked on March 17, 2017 9:48 pm
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Posted by Niharika Singh (MONEY FORUMS: 0, Answers: 3)
Answered: December 28, 2018 1:01 am
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Hi there, Now-a-days many options are available for investment like investing in share and stock market, property and many more. For the initial investors, investing in international markets can be the best option to gain profit. Investing in Forager Funds Management(https://foragerfunds.com/international-fund-summary) of Australian market, can be the best way to secure your money for the future.

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Posted by Lucy Serle (MONEY FORUMS: 0, Answers: 1)
Answered: May 24, 2018 3:39 am
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Hi Siddhant, and thank you for the question.

Here are some general thoughts on getting started with investing. It is a broad topic, so I will cover some basics.

Generally, it is important that one sets the stage before beginning serious investing. This means getting one’s financial house in order by having paid down or off any high interest debt, actively keeping to a budget, and having built (or are building) an adequate cash reserve (emergency/opportunity fund).

Once these foundational steps have been taken the potential investor needs to get very clear about goals and objectives. Being very clear helps establish priorities if not all goals can be “on track” immediately, and helps with conviction to follow a disciplined plan of action. Once the goals and priorities are established you can use the calculators located under our “Resources” tab to help you quantify how much you need to allocate to each goal.

In determining how to allocate your resources to your goals you will need to give consideration to risk. While industry professionals speak of risk in terms of volatility most investors think of risk in terms of probability of losing money. From the investors standpoint an investment in which you cannot lose money has no risk, and it can only get more risky from there.

Investing, however, is working with known (as much as possible) risks. In investing your likelihood of a return in excess of your initial investment – across time – is quite high. If the likelihood of a return in excess of your investment is not quite high it is not investing – that is speculating. Investing is fairly predictable, when taking longer-term time horizons into consideration. There is still a spectrum of how much risk an investor can assume. Assuming more risk increases the investor’s potential for a greater return while similarly reducing the probability of achieving that positive outcome.

So start slowly, take gentle calculated risks as you slowly build experience. Begin with conservative investments, then add more volatile (higher risk) investments as you gain experience.

You may want to relegate the management of your assets to a professional service, such as an asset allocation service or a robo advisor. Or you can do it yourself by researching funds and investing directly with the fund family of your choice. Generally it is a good idea to leave individual stocks aside until you build a little experience and some more capital to work with. For many beginning investors it is also easier to work with those comingled types of investments where you can begin without a large up-front commitment, building by systematic payments instead.

The last thing to do before you commit the money is to establish your personal rules. By this I mean committing to yourself under what conditions you would sell, and what you will hold through. Determining rules for yourself in advance will help you to steer through volatility and down markets when others are selling at a loss. There are also conditions which could make selling a good idea, such as a protracted period of underperformance, or some other objective criteria. The key here is to both determine the criteria in advance and stick to it to prevent making an emotional decision.

I hope these basics help you get started! And ask us more questions as you move forward on this journey!

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Posted by Peter Neeves (MONEY FORUMS: 1, Answers: 59)
Answered: March 22, 2017 11:24 pm
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