Millennials are often called lazy and even labeled as freeloaders. The reality is different, but many would still debate it. The principal argument against such claims is the side-gig mentality they have. Even if millennials have one job, they have other sources of income be it a side-gig, an investment, or whatever it may be. However, not everyone has the know-how to do those. So, if you are looking to get into investing here are three things you need to know.
- Investing in Stocks is a Risk
Think of it this way; the stock market is like a casino. Many people who participate or are involved with it are seen making big money and living it big. At least that is how they are presented, but that is just one side of it. Just like casinos, your money does not always go up in stocks. There will be times that the value per share significantly decreases.
The critical thing to look for here is whether or not the company you have stocks in is making money or not. After all, their value is based around the profits they can prepare for the owners. Knowing this, it will do you good to know about trends and indicators for selling or sticking with your investments.
- Red Flags to Look Out For
Even with the unpredictable nature of stocks, there are always red flags to help you identify if you should sell your shares or avoid a company altogether. You have to invest in intelligence. As we said, the critical thing to look at is the profitability of a company, so if a company isn’t making profits avoid that. Look at how they performed over the past 3 to 5 years. That should give you an idea if you make money out of the investment or not.
Also, steer clear of companies that are in debt or under investigation. The first one means that the profits are yet to go back to the owners, the latter presents a lot of negative potentials. For example, a company under investigation can soon be a company asked to shut operations down.
- Invest with Intelligence
One thing you have to understand is that stocks are not a get rich quick scheme. It will take time and effort. You will have to pay attention to market trends and new developments in the trading world. In other words; invest with intelligence. If you want to start, try investing in a company that you are familiar with. Knowing the industry of the company you are investing in gives you a better understanding of whether the business is doing well or not.
There is way more to investing than these three things. This article is here to help clear misconceptions and keep you from making a half-baked attempt at investing. For a more involved approach, check out investment managers Australia to help you get started with your investing.