Property? Bond? Business? Stocks? Here’s a tricky scenario. You have more than enough savings as emergency funds, your income-to-expenses ratio is well sorted out, and you have extra cash for investing. But where do you put your money? Well, the answer is not that complicated. Just choose the one you prefer, as long as you do it right. If you want to explore stock investing, here’s how you can get started.
Stocks, Really? Should You Trust the Market?
The moment you start thinking about investing, its cousin “risk” comes into the picture. You definitely do not want to lose your hard-earned money by making bad investment decisions. It’s true that a stock market is a risky place, but usually, that is only true if you enter the market blindfolded. DON’T. DO. THAT.
Sidebar: Knowledge is always the most important thing before you invest. If you’re based in Malaysia and are interested to join a free program to “belajar saham” – well, there’s plenty of options you can find online. Just make sure you choose the right one!
Investing the Right Way, the Warren Buffett way
Don’t be too scared to invest just because other people around you got burnt. Chances are they do not have the right knowledge and are not so good at controlling their own emotion when dealing with an uncertain market. Want to know the trick to invest in the right companies? Here’s how you can do it.
Familiarise Yourself with the Company before Investing
Rule number 1, check and evaluate the company first. You can do this by assessing the business model as well as the company’s historical financial performance. The better the company’s performance, the higher the chances that it is able to reward the investors. The basic rule is this, always remember that investing is about buying your piece of a real company.
Human Factor, Just as Important
Apart from the business model, you should always take time to get to know the management as well. One of the questions you need to ask is if the management has share in the company. If they do, it means their net worth is tied to the company’s valuation. When that is the case, they would definitely want their company to grow long term.
Valuation vs Price as the Final Step
Did the company you like pass the previous two criterias? Only when it does, you should prepare yourself to make a purchase. This can be done by finding the true value of each share in the company, or known among investors as the intrinsic value. This is a crucial final step to make sure you don’t buy the share when it is overpriced.
Trust Your Decision and Hold
Once you have made the move, don’t be too quick to judge the company’s performance by monitoring its share price on a daily basis. It’s true that the market is uncertain, but great companies will usually grow over the year. As value investors, revisiting your stock portfolio every six months or 1 year is quite good already.
Take Your Investing Journey to the Next Level!
What I shared here is basically the fundamentals of investing. However, you definitely should not stop here and instead, continue to learn more on how you can make your investment less risky. You can find quite a number of sources online to help you out, and one of them is Bijak Labur website. Visit the site to know what it’s all about. Check out this link if you’d like to enroll for a free online webinar: https://bijaklabur.com/belajar-saham/
While we’re at it, I’ve also found this video online – sharing it here as you might find it helpful. 🙂 Ciao!
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