Planning to enter into the stock market? The investment market may seem tricky and confusing for the first-time investors. As a beginner investor, it is often confusing on what to buy and when to sell the stocks, they will often worry about the investment returns and will doubt themselves if they could reach the financial goals as expected or even be wondering if they get into a loss at the end.
However, most of the negative thoughts that bother you might be due to the lack of knowledge. You can clear these doubts by enrolling into an investment course in Singapore to improve your knowledge. If you are planning to try your luck in the stock market, this article might be informational for you as it explains the investment principles that every beginner should know. Listed below are some time-tested principles that can help you start and stay on the right track in your investment portfolio.
Improve your knowledge
You might have a financial advisor or an investment agent working with you to advise you. However, it is essential for yourself to have a better understanding of the market instead of relying on others. Knowledge is power when it comes to investments, especially when it comes to value investing Singapore. When you can generate a good picture on the investment portfolio and be able to anticipate the happenings in the market, you can minimize the risk involved. Also, it will help you to have a more clear and realistic expectation of your profits. Investment is all about putting your money with a calculated trust that you will get good benefits. You can minimize your risk when you maximize your knowledge.
Diversify your investment
Investment diversification is defined as ‘the process of allocating capital in a way that reduces the exposure to any one particular asset or risk. A common path towards diversification is to reduce risk or volatility by investing in a variety of assets.’ You can considerably cut down the possible risks to your portfolio by investment diversification. Experts point out that one effective way to deal with risks and increase the potential returns in the long run is to divide the risks across a wide range of investments. Investment options like shares, bonds, cash, and real estate will not remain sunny every time. Diversifying the stocks geographically will also help to minimize regional risk.
Have long term goals
If you listen to the tips from the veterans of the stock market, you can deduce that they often advise to keep goals on a long-term basis and this strategy is proven successful by many investors. The longer term you invest, the bigger the profit gained from compound performance on the original value of your investment. Another advantage of having long-term investments is that it is more tax friendly. However, it is better that investment strategy should be planned as per your personal financial goals. When you adopt a long-term investment strategy, the short-term fluctuations of the market will not make you worried.