Hello everyone. I’m @olivertomolife and I love investing and shareholder benefits!
Have you tried to start investing in 2021, but have a lot of concerns?
Investing involves risk, and in the worst case scenario, you could lose a lot of money.
In this article, I’m going to show you what a beginner needs to know in order to face those risks!
The content is based on my experience of making mistakes when I was a beginner, so if you want to learn to invest, this is a must-see!
The author has been investing for three years and has experience in the securities industry.
By reading this article, you’ll learn a thing or about investing!
- Five things you should know if you are within your first year of investing
- Three simple things a beginner in investing can start with
Five things you should know if you are within your first year of investing
I will now explain the five things that a beginner investor should know.
1 It is dangerous to make decisions based on dividend yield alone.
First of all, I would like to tell you that it is very dangerous to buy stocks based on dividend yield alone.
Dividends, which are a portion of earnings returned to shareholders, can tell you how much a company cares about its shareholders.
However, companies with too high a dividend yield are often overextending themselves, which may be putting pressure on the company’s finances.
Therefore, we should not judge a stock by its dividend yield alone.
When I first started investing, I did not understand this very well, and I made some mistakes.
I have compiled the following list of stocks that pay stable dividends.
I urge everyone to be careful.
2 It is dangerous to make decisions based on shareholder benefits alone
Shareholder benefits are popular among individual investors, but are there people who make decisions based on these benefits alone?
Surprisingly, the shareholder special benefit system is a culture unique to Japan, even if you look at other countries.
In addition, as more and more companies are trading internationally, some companies are discontinuing shareholder special benefit programs in order to be fair to overseas investors.
Therefore, buying stocks because they offer shareholder benefits is a dangerous reason to do so.
If you are going to buy such stocks, please discuss with yourself whether you can support them even if the special benefits are eliminated.
3 Be cautious when investing in venture companies
Venture companies are often traded in short-term transactions, but beginners should not buy them.
This is because they move quickly and may be left behind.
This type of company is often used as a stock-in-trade, so if you buy it with a naive feeling that you might make money, you will lose a lot of money.
I recommend that you try to buy from stable companies with little movement.
4 Don’t put too much faith in securities analysts
Securities analysts are often seen on TV and in magazines. Of course, they have national qualifications and many of them are excellent, but it is dangerous to trust them too much.
Sometimes their predictions are right, but sometimes they are wrong.
They have many years of experience and a lot of knowledge, but the world of investment does not work the way you want it to.
I do not recommend that you make a decision to buy this company because an expert said so.
I think it should only be used as a reference for your own judgment.
5 Investing is not speculation
I am ashamed to admit that before I started investing, I used to think of investing and speculating in the same way.
I believe that people who have never actually invested do not understand the difference between them.
This misunderstanding arises because we generally see a lot of people who have lost a lot of money and lost everything.
It is true that this can happen if you use the wrong method, but if you invest with proper knowledge, you can grow your own assets, so please do not misunderstand.
Three simple things a beginner in investing can start with
With all this in mind, I would like to conclude with three things you should do if you want to start investing.
1 Analyze the stocks of companies you like.
First, imagine your surroundings and hobbies.
I recommend that you analyze a company that is related to that thing you like.
If their financials and performance are good, you may want to start investing in them.
The following is a list of companies that you can invest in for the long term for less than 100,000 yen.
2 Choose a securities account
You can open a securities account from many securities companies.
After considering fees and convenience, online securities are the most recommended.
There are also companies that offer face-to-face services, but I do not recommend them because of their limited fees and services.
Different companies offer different types of stocks such as overseas stocks, so if you want to buy Japanese stocks or foreign stocks, choose an online brokerage firm.
3 Start investing with mutual funds
There are many people who are afraid to buy stocks from the start.
For those people, I recommend mutual funds, which can be started at a low price.
Since they are managed by professional institutional investors, there is no need to check stock prices every day.
With an eye on the post-infectious world, why don’t you try to manage your assets little by little?
- Judgment based on dividend yield alone is dangerous.
- Judgment based on shareholder benefits alone is dangerous.
- Be cautious when investing in venture companies.
- Do not overestimate securities analysts.
- Investing is not speculation.
If you’re within your first year of investing, here are five things you should know!
Investing is your own responsibility. Make your own final decision after referring to a variety of opinions.
I will continue to provide useful information on investing, so please stay tuned.
Thank you for reading to the end!