| Where should a novice really start off? | | | | riches, there's no easy road too. That's the |
| | | | second rule to realize, for every beginner |
| First of all, I believe it should be with | | | | out there. |
| this realization. | | | | |
| | | | The third rule to realize in this online |
| The stock exchange is not the place for 'get | | | | investing guide for beginner: though you can |
| rich quick' ambitions. If riches can be | | | | treat your investments as 'hobby', it can |
| acquired in a flash, it's not in the | | | | never be a 'fun' thing. The world of |
| investment field, despite appearances. While | | | | investments is ruled by the investment banks |
| you may hear some home run stories, in the | | | | and their executives. They handle all the big |
| end, most averagely financed people hardly | | | | deals like floating companies, issue bonds, |
| ever get rich from stock investments. Even if | | | | trade stocks, bonds, currencies and |
| share value doubles in a year (a highly | | | | commodities. They do make huge amounts of |
| unlikely event), you will still need to have | | | | money. They also employ armies of MBAs to |
| invested a fortune to gain an extra fortune. | | | | give them an edge to win the investment |
| If you cannot invest that much to begin with, | | | | games. It's their business to go all out to |
| would a 100 percent return make you wealthy? | | | | make money. They are not playing around. It |
| Right, it's Not so fast. First rule: to be a | | | | is serious business. |
| good investor, It's better to put away any | | | | |
| desperation for quick riches. | | | | So, if you want to succeed, you need to |
| | | | buckle up and be businesslike. How do you |
| To be sure, there are ways for an investor | | | | adopt this non-intuitive approach to |
| can make an obscene amount of profits. But | | | | investing? A good place to learn is to look |
| these almost always involve gigantic risks. | | | | up for books by Benjamin Graham. Digest them |
| Options and futures are such avenues. For a | | | | in earnest. This will take you a while and |
| beginner investor with limited mileage, you | | | | it's the right place to start your education. |
| do yourself a huge favor to steer away from | | | | You will be learning from Ben Graham, the |
| such investment vehicles. First, you will | | | | father of successful businesslike investment |
| knock your brains out to learn them. Next, | | | | methodology. |
| total bang-up losses can come so swiftly. | | | | |
| Worse still, potential losses can be more | | | | With all the above rules, it may sound overly |
| than the sum invested, if you dabble in | | | | difficult for the little guy to make money. |
| futures and are not careful. Markets often | | | | But I can tell you it's still possible |
| move quickly and you cannot turn your | | | | because I know I do make money as a little |
| attention to other urgent matters. There are | | | | guy. What gives us an edge is, big money |
| better ways to start as an investor than do | | | | funds find it quite impossible to invest in |
| options or futures, which are more like | | | | smaller companies. So if you are able to spot |
| gambling to me. I may sound traditional here | | | | any of these companies' products doing well |
| but I believe a prudent investor always look | | | | in the malls or supermarkets, that should |
| for solid and proven companies to invest. | | | | give you a head start over the big-time |
| Companies that are quoted in the stock | | | | analysts of investment banks. This is another |
| exchange, companies that are trusted to have | | | | successful investing approach you can learn |
| a predictably brighter future. Such | | | | through the books by Peter Lynch. He will |
| investments are better for beginners to pick, | | | | show you how to pick winners that he called |
| and relatively safer to invest with their | | | | 'tenbaggers'. |
| money. | | | | |
| | | | Investing in the stock exchange, to do well |
| Nonetheless, it must be bear strong emphasis | | | | you need to treat it like running a business. |
| that beginners will not find it easy to make | | | | Maybe a part-time online business. Still, |
| money at the stock exchange. If it were easy, | | | | it's a no-nonsense business. |
| who then would be Warren Buffet? Everybody | | | | |
| who's an investor would be a billionaire. The | | | | As a beginner's guide to investing, I cannot |
| path to investing success takes time, serious | | | | stress enough that it is extremely difficult |
| study, disciplined efforts and most | | | | to make a second income from the stock |
| importantly, independent thinking. Only a few | | | | exchange. It can be done and you will learn |
| has the will and endurance to sustain this | | | | the skills, but it will take time. That's not |
| journey. I have certainly faltered time and | | | | all, you will need to put in serious study, |
| again. But then, tell me who should be spared | | | | consistent effort, and independent thought, |
| from setbacks and confidence knockers? So, | | | | to end up doing really well. |
| there's not only no fast road to investment | | | | |