Investing is one way for an individual to earn additional income in his life. The potential of earning solid returns have attracted many to investing, especially online investing that can be conveniently done over the internet. Unfortunately, many are still confused on how and where to begin so here are some tips on doing so.
1. Determine the type of investment product
The first tip is to determine the type of investment product you wish to invest in. Today, there are various types available online, such as foreign exchange (forex), equity crowdfunding and bitcoin. You will also need to choose the right platform or provider offering such investments. Importantly, learn more about how the investment opportunity works or runs.
2. Seek financial advisors
Consider seeking the assistance of financial advisors. At times, you would need advice or recommendation to identify and evaluate attractive investment opportunities.
3. Widen your ability to understand investment jargons
To be able to read and understand the technical aspects of the investment opportunities is important. Learn more about risk management, principles of accounting and how the market works amongst others. With online investing being a new phenomenon, particularly for the Indonesian society, it will be beneficial to approach it with knowledge.
4. Understand your own risk threshold
In every investment, there is a risk of loss including the loss of your entire principal sum. Invest only what you can afford to lose, and also exercise prudent risk management tactics. This includes diversifying your investments, as explained in tip number 5.
5. Spread risks and diversify your investment
If you a beginner, it would be wiser to hold a diversified portfolio of investments. To place all your funds into 1 investment could lead to very significant losses in the case where the investment turns sour. As Warren Buffet says it, “Do not put all your eggs in one basket.”
6. Do not invest on impulse
There is a wise saying that goes, “An investor’s worst enemy is himself”. This can be analogised to a shopper who purchases on impulse upon seeing a highly attractive product. When in fact, he / she does not necessarily need the product.
A person who invests online may feel and do the same with their investments. Do not fall for offers that could in the end be non-profitable. As such, always maintain a clear and rational mind when you are deciding to invest.
7. Review and evaluate your investment behaviour
Do not fall into the same hole twice. As a last tip, review the investment steps taken. Usually after an investment goes bad, one will change their strategy or method. This may include reviewing your investment allocation to build a better diversified portfolio, as mentioned before.
The above 7 tips are just some of the things you should bear in mind to ensure successful and safe investments. With the right decisions made, it has the potential of making a positive contribution to your overall income.
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