At one point in your life, you will definitely reach the part where you no longer want to focus on active income alone. But the question now is, what are the safe investment options for you to generate a stable passive income stream? If you are new to investing, stocks may be a good place to start as you can start with smaller capital, and scale up when you know how it works.
Is Stock Investing Safe?
Risk is indeed there in every investment option. The same actually applies to stock investing as well, particularly because of market volatility. If you ask ten people who invested their money in stocks, probably at least half of them didn’t like their return. But that’s mostly because of lack of knowledge.
Adding a Layer of Protection
However, if the risk is the reason why you don’t want to do it, you have to rethink your decision. Think of it this way, driving is also risky, but didn’t you do it anyway? What’s important is to know how to drive the car, the road safety rules, and know that you’re fit to drive. You’ll be fine if you equip yourselves well. So that means, you should learn stock investing before you actually do it.
Behind Every Stock is a Company
When it comes to investing, do not simply invest by looking at the share price. Instead, what you should do is to evaluate the company behind the stock itself. There are a few questions you should be asking to test where the company is a good choice, such as its financial performance, growth driver, economic advantage, and more.
Next Step, Management
Once you check the company, and if it passes your evaluation, take the next step to familiarise yourself with the company’s management. You can find their profiles in the company website, and then go ahead and study the management. Do they have the right experience? How is their track record so far? If you trust the management, then proceed to the next step.
What’s the Buying Price?
Get your price right. When it comes to value investing, it matters that you do not overpay for the stock. This is common for booming companies, where the market is usually way too optimistic about it. Be careful, because you don’t want to find yourself in a situation where the price drops once the market sentiment changes.
Long Term is the Only Way to Go
Don’t be fooled by the popular method that the only way to invest is to keep on buying low and sell high through trading. It might be more common, and more hype, but it is actually very risky for investors that do not have adequate knowledge. Get your price right by finding its intrinsic value, and only then you invest.
Want to Learn the Steps for Real Investing?
Knowledge should always come first. Remember, make sure you equip yourselves well with the right skillset to evaluate good companies. You can do this be joining programs offered by reputable education provider, one of which you can find through Bijak Labur website (bijaklabur.com). All the best in your investing journey!