Investment precautions for young investors

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Investment, Image by Nattanan Kanchanaprat from Pixabay

Warren Buffett started investing at the age of 11, when asked about his investing journey, he replied: “ I wish I had started earlier”. As they say “Earlier the better”, if you have been thinking on how to start investing, then you have landed at the right place!

Considering, the percentage of young investors falling into frauds are increasing day by day, so let’s dive into some tips to save yourselves from these schemes!

1. DO YOUR RESEARCH

Before starting anything, the first thing you need to do is to do full research on that firm/company and you can even make notes about the future deliverables of the company! Don’t just rely on one source of gathering information, try as many sources as you can(whether offline or online)! You may even contact any employee of that firm if you know them beforehand or some firms may even provide you with details over call or e-mail!

2. BEWARE OF FAKE NEWS

If you are a young investor, then chances to fall for fake news are relatively high! If a firm says that investing in them will provide an ROI of 40-50% every year, then consider it as a red flag because that’s just not possible! Abhinav gold, a Bhilwara based company promised to give 1.72 lakh after two years on an initial investment of Rs.6000, that is approximately 28 times, and 20,000 investors got duped by this scheme! If you still don’t want to believe then you can look at Harshad Mehta’s case in the past!

3. DON’T RUN BEHIND MONEY

The greed for money is so high that half of us fall prey to these schemes. The reason being the fraudster knows how to do sugarcoated talks and cheat you, but it’s you who has to remain aware! For example- they may even begin by asking your Bank Account info and in the very next second, you will be duped! So, investing in shares is a long-term game, don’t run behind money, have patience and you are good to go!

4. START INVESTING LESS

No doubt, when you hear schemes like these, you may wish to spend a lot of money altogether to get better returns. But, ask yourself one question “Are you ready to take this much risk?” “ What if the price of that share drops tomorrow?”, also because you are at the beginner stage, the investment could be your monthly pocket money only.

5. SEEK REGULAR ADVICES

When you are just starting with your initial investment, it is always good that you seek advice from someone you trust, it could be your elder brother, father, neighbor or any employee working in that company! You don’t have to take advice from everyone, but take only from people whom you consider your idol or inspiration!

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