When you start investing, there is still a lot to learn. Knowledge and insight are extremely important to be able to invest in a responsible manner. To help you get started, here are tips to improve your investing.
Before you start investing, it is advisable to register with a broker and first try out investing with a free (demo) account. Select in advance a few shares in which you want to invest and which you want to follow. Do not use all your money in one go, but spread your risks. By practicing you get more knowledge and insight. So that is very important.
Follow the current course
It is extremely important to closely follow current stock prices. A good overview of the prices on the current stock market is important if you want to invest successfully. You can then respond directly to the latest developments to increase the chances of (more) profit. So always stay well informed of all stock market developments. Only then can you respond quickly and appropriately to changes in the course.
* Stay well informed of the current rate.
* Try to discover recurring patterns.
* Try to figure out which value the price usually moves.
* Limit your losses by placing a ‘stop loss’ above these values.
Immerse Yourself in the Company Prospects
Before you actually buy shares in a company it is advisable to thoroughly examine the company. View the future of that company, but especially the potential of the sector. Even if the company is successful, if the market in that sector is not favorable at that time, for example due to a recession, it is not always wise to buy shares in that company. Also look at the possible plans for the near future. Sometimes the value of that company can increase due to, for example, new products that they put on the market.
By doing thorough research in advance you can reduce the chance of losses and increase your chances of winning.
* Investigate the financial history of the company.
* Research the development of recent years.
* Also look at other companies in the same industry and compare performance.
Look especially at companies with growth potential
A high profit / price ratio naturally makes a company very attractive if you want to buy shares. However, companies with a high growth potential increase the chance of more profit in the future. Do not only look at the potential of that company, but especially the potential of the entire industry. This means that the chance of successful investing and higher returns in the future is many times greater.
* Go through that company’s annual report and examine the future plans.
* Look at new products that the company wants to release and the potential thereof.
Beware of transaction costs
Especially novice investors sometimes forget to include the transaction costs. Even though they are ‘only’ 0.5 percent, they can still make a big difference in the long term. With online brokers you can nowadays often invest cheaply.
These companies, often owned by the family for a long time, will generally be more careful with their capital. They will also be more careful with acquisitions and pay more attention to the price.
They attach great importance to their company and will want to keep their company at all costs, so they will always sail a safe course. This usually means more peace and a greater chance of a higher return for the investor.
Borrow money for investing
A few years ago it was the most normal thing in the world to borrow money to start investing, after all, the prices just went up, so it was a game without ‘not’.
The banks were also happy to cooperate, because they are not only made money from the loan, but also from the commissions that you paid to invest. After the start of the crisis and the fall in stock prices, this ended abruptly and a lot of people lost a lot of the amounts invested.