Want to invest in share market? Confused how much money to get in and what type of stocks to invest in? You might be stuck and having some difficulties to make decisions. Here are 6 things to consider as a starter if you are thinking of to invest in share market:
1. Invest in mutual funds: This is the safest way to start. Your money is not going anywhere. Returns might be steady but you will get returns. As a starter, you should start with mutual funds and then when you learn things around, you can move on to IPO.
2. Invest in IPO: Initial public offering (IPO) is a type of public offering which is used to raise additional capital into the venture. When a private limited company changes into a public limited company, it offers IPO in order to gain its capital. When you decide to but IPO, you need to first study the company in order to know what the future holds for it. If you believe this has a great future ahead then just go ahead and buy it.
3. Only buy shares of those companies which you know: Just like number 2, don’t buy shares of companies that you have no idea about. It is important to understand the way companies work and its future plan. First, always think long term and second, always invest in those companies that are familiar with. For example, Google, Facebook are some similar ones and you know how they generate income. Knowing how companies generate is very crucial because the more the revenue a company makes, the more value of shares are.
4. Red flags alert: You need to see when choosing stocks if there are any red flags or not. Red flags mean that the companies are not making any profits. The share price of these companies is always dropping and maybe with a lot of debts to pay. They might also be under investigation and might have very unstable dividend history.
5. Keep learning: You will never know everything. The best thing you can do is always keep learning, get updated, be informed and keep evaluating things around. Its all about investing in your skills first and getting them all out at the right time. Over time, your skills will develop and so will your investing portfolio.
Note : This is member submitted content. And featured image is used from Pixabay.