Everyone has a dream that they want to achieve. Buying a house, buying a car, sending parents on a pilgrimage, are some examples of these dreams.
To make this dream come true, there is one thing you can do. Namely, investment. Investment is an attempt to grow money in the future so that you can easily fulfill the various needs you want.
However, investing is not an easy thing to do. You can get a satisfactory investment return if you understand it well.
For this reason, if you are a novice investor, you must learn to invest well. Indeed, it would be better if you learn to invest early. Even so, it’s never too late to learn to invest regardless of your age.
The following are investment learning tips for beginners that you should know.
Learning investment for beginners, this is what you must pay attention to
If you want to jump into the world of investing, of course you have to learn investing for beginners first so you don’t make a wrong move. Well, there are some important things that you should consider before deciding to invest.
1. Start investing as early as possible
You definitely want to be able to feel financial freedom from a young age, right? Financial freedom means a situation where you don’t have to think about finances, because you no longer need to work for money. Instead, it is money that works for you.
To achieve this, you can start by learning to invest yourself. Just try to find out on the internet with the keywords learn investment for beginners. There you will find various articles that you can learn about investing.
2. Setting investment goals
The first thing to consider when learning investing for beginners, you must first know what your investment goals are. In general, investment goals include preparing a pension fund, buying a vehicle, buying a house, or preparing an education fund.
In addition, setting investment goals also means that you have to determine how much money you have to set aside for investment.
If these two things have been done, it will be easier for you to choose what investment instrument is right and according to your needs.
Take for example, if you have a goal to buy a house with a period of 10 years into the future, then the right investment instruments are stock investments and stock mutual funds. The reason is, these two instruments can provide optimal benefits in the long term.
3. Knowing each other’s risk profile
Learning to invest for beginners is difficult and easy. After setting your investment goals, you should know that everyone has their own risk profile. That is why, you must first know you are an investor with what kind of risk profile.
There are three types of investors based on their risk profile, namely:
Investors with this type of risk profile prefer low-risk investments because they tend to be afraid to speculate.
Several investment instruments that are suitable for investors with a conservative risk profile include money market mutual funds, as well as investments in gold and precious metals.
Moderate investors are not afraid to take risks when playing in a more volatile market in order to get big returns. That is why moderate investors are generally more daring than conservative investors.
One example of an investment instrument for moderate investors is a mixed mutual fund.
An aggressive type of investor is always ready to enter a volatile market with big risks in order to get a big return. In general, this type of investor is brave enough to lose money.
Aggressive investors are very appropriate to invest in the stock market which is very volatile but promises big profits.
By learning investing for beginners, you will be able to map out whether you are a conservative, moderate, or aggressive type of investor.
Also read: Find out the types of stocks with the biggest dividends below!
4. Using own funds
The third step in learning investment for beginners is to use your own funds to invest. This means, you are strictly prohibited from using borrowed money to invest.
Why is that? Borrowing money to then invest it can erode the profit margin that you can pocket from the investment.
What is more worrying, if the investment you make does not go well. This can cause your debt to pile up so that it burdens your own finances.
Therefore, for novice investors, it would be better to invest using their own money. That way, you can fully enjoy the finances you get. If the investment returns are not as expected, you don’t have to worry about returning the loan money.
5. Determine the investment period as well as the target funds needed
In the process of learning investment for beginners, an investor must first determine the investment period. Because, this will affect the nominal investment and the type of investment instrument that will be chosen later.
Usually, the longer the investment period, the more money that must be prepared. The choice of instrument will also follow these two things.
6. Allocate funds for investment consistently
For novice investors, you can start investing by setting aside funds that match your abilities. Then, you have to be consistent to set it aside every month.
If you are still in the investment learning stage, don’t allocate too much funds for investment. Later, as time passes and your investment knowledge increases, you can add investment funds on an ongoing basis.
7. Start investing by indirect investment
The next step in the investment learning process for beginners is that you can start investing in the capital market indirectly.
One way is to buy mutual fund products . Later, there is an investment manager who will help manage your funds.
If you already understand well the existing investment instruments, you can determine the desired investment yourself.
8. Choose a trusted investment platform
Now, investing is easier to do along with the development of the digital world. This is indicated by the many digital platforms that can facilitate online investment.
If you have learned investing for beginners and have determined what investment instrument you want to choose, the next step is to determine the right platform.
The important note here is that you have to choose an investment platform that has a good reputation and has obtained permission from the Financial Services Authority.
9. Don’t put all your eggs in one basket
For those of you who are still learning investing for beginners, there is one very well-known investment term that you must understand. Namely: Don’t put all your eggs in one basket.
The explanation is like this. If you put all the eggs in one basket, when the basket falls, it destroys all the eggs.
It’s different if you place eggs in several baskets. When one basket falls, the eggs in the other basket will not break.
If it is associated with investment, then the term putting eggs in various baskets can be interpreted as a diversification step. The goal was that, to minimize losses that might occur.
Not only that, by diversifying, you can set different goals for the investment.