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This question has been asked very often in recent months. More and more people are thinking of investing their money in stocks and now in cryptocurrencies. Since the markets collapsed in March, because of the Covid-19, many people have been looking for how and where to invest. In every crash, there are opportunities, and the shares of big and profitable companies show the fastest recovery.
So what does investing mean?
In simple words, investing is a commitment to a capital for a period of time to increase the money you have in your wallet. There are two ways to make money: To work and exchange the time for money and to invest and have assets that bring profits and passive income. Unless you want to see if you are lucky and try an online casino. Imagine that you can have fun with one thousand games like Starburst, Book of the Dead, and also have the opportunity of winning money.
What are the reasons for investing?
To increase your wealth, to become financially independent, to protect yourselves from inflation and not lose purchasing power by letting them sit, either in your home or at the bank with zero interest rates, and to fulfill some financial goals (e.g., buying a house, car or vacation).
There are various investment products, such as bonds, shares, real estate, derivative stock exchange products, commodities / Precious metals, and cryptocurrencies.
You must know and understand how a particular investment works before putting your money anywhere. You shouldn’t invest money in what you don’t understand, and you shouldn’t invest to make a lot of money right away. This is considered a high risk. No one guarantees a definite profit. In the short term, the markets are unpredictable and can be affected by many events. In the long run, however, the stock prices of companies that are doing well are rising.
To start investing, one does not need to have a lot of money, nor to pay gold in various services or stockbroking companies. There are many trusted online platforms that anyone can start investing for as little as 10 euros.
Common Mistakes people do in the beginning
Lack of patience and expectation for many gains in a short time. Premature or excessive reaction to possible price fluctuations resulting in a lot of money being lost in the long run due to fear and lack of emotion management and unrealistic goals and lack of plan and strategy.
What does one need to learn to start investing?
It is essential to know that in investing, you get something that has a positive expected return, you know how it works, you have done the research and which you can manage and reduce the risk in different ways. Therefore, if one wants to become a proper and serious investor where he will know where to invest, what he expects from this investment, and how it works, he should know the following: The basic financial terms and their concepts, how markets, stock exchanges, and businesses work and how to read financial statements.
Of course, there is always the choice of a financial advisor for anyone who does not want or does not have time to sit down and study, but it is good to know at least the basics to understand what the financial advisor will tell him. Otherwise, you will be left in the advisor’s hands, and you will have no legitimate opinion.
It is also crucial that anyone who wants to get involved must learn how to be patient, to eliminate any emotion when it comes to investing, and how to create a plan with goals and strategies. The next step is to create your portfolio and distribute it. Here, it depends on the situation of each one, the profile of the investor, and the tolerance of danger/risk.
