What questions you should ask yourself before you get inside a stock market?
Understand that in this new era, investment is no longer a difficult or demanding task. The move to do everything digitally has made it easy for beginners to do investment and trade and it also made the professional investors more efficient.
Creating a ‘demat’ account and trading account is a 20-minute practice that gives you access to the international online stock market from most countries. Notwithstanding the ease of investing in stocks, you should not forget the basics of stock market before you invest in financial markets.
However, as a beginner, you should always ask yourself a few questions to understand whether you are ready to be a part of stock industry or not. Here, we will discuss those facts and those from South Africa can easily choose jse all share after reading all the details below.
Set financial objectives
It is extremely important to set financial goals before you start investing. Without an adequate plan for what you want and what you need to save, investing will be a wrong decision for you. You may think your money should be invested in the stock market rather than lying idle in your savings account and then you would wait to set a financial goal. But that would be a wrong step.
Find out what kind of investor you will be-
It is difficult to figure out what sort of an investor you are without ever investing a penny in the stock market. But here you can think about these basics before you indulge yourself in this industry.
The value investors
Value investors are the kind of investors who invest in stocks of companies they believe to be inherently valuable by what they intend to accomplish. They invest in these stocks because they have done an in-depth financial analysis of the company.
The growth investors
In contrast to value investors, growth investors are more aggressive. Investments based on growth focus on appreciation of capital and are targeted at young companies at their stage of growth. Growth investors invest in the potential of enterprises, and they pay large for those investments. But if the company fails to unlock its full potential, even the capital you invested will be lost.
Make sure that you are of right age
Know that it is okay to start in this stock market industry as an investor in whatever age you are. Your age will only determine how exposed you should be to different asset classes on your portfolio.
But yes, if you are of young age, you will have more time to expand your investment to its full potential. As you grow old, your savings can be placed in more secure, short-term instruments as you achieve the financial goals you have set themselves and want to quit quickly.
Are you an investor or a trader?
Find out the time you want to spare here and whether you want to trade at all. The domain of professional investors, hedge fund managers, and financial institutions is day trading, arbitrage trading, and investment in stock.