Out of the many questions we have received from our recently-concluded ?Ask A Foolish Question? exercise, there was one particular question that struck a chord with me. This question brought back memories of my early investing journey, and how I suffered from a bout of information overload in those early days.
The question was (slightly edited):
?What advice would you give to someone who has never invested in stocks before and would like to start??
There are tons of investment websites (us here at www.fool.sg included!), books and seminars…
Out of the many questions we have received from our recently-concluded “Ask A Foolish Question” exercise, there was one particular question that struck a chord with me. This question brought back memories of my early investing journey, and how I suffered from a bout of information overload in those early days.
The question was (slightly edited):
“What advice would you give to someone who has never invested in stocks before and would like to start?”
There are tons of investment websites (us here at www.fool.sg included!), books and seminars which offer such information. And that brings me back to the point where I mentioned that I was suffering from information overload.
Start From The Basics
Instead of sifting through the sheer amount of information available in the financial world, a simple and quick way to start would be to visit our website, www.fool.sg. The “How to Invest” tab provides a quick start to investing; we recommend that you start with reading the 13 Steps To Financial Freedom section. “How to Invest” also includes simple “How To” guides such as How to Open A Brokerage Account and How To Make The Most Of Your CPF.
Get a Mentor
Teachers were an integral part of our school-going days. But why not apply this logic to the world of stocks investing by finding yourself a great mentor?
There is this famous saying: “Behind every successful person, there is a great mentor”. The legendary investor, Warren Buffett, has Benjamin Graham as his mentor and learnt about value investing from him.
As your mentor has already walked the tried and tested path before you, he can really give you advice on things you may never know of and possibly cut short your learning curve. This mentor doesn’t necessarily have to be someone you know, it can also be an investing master such as Peter Lynch or Warren Buffett – learn about his principles of investing, and apply them to your own investing.
Debunking your Myths
Have you ever heard of people commenting that, “If investing in stocks is easy, everyone can be millionaires”? Or “Investing in stocks is just too tough for me”?
The primary objective of doing any task is to have the right mindset before you embark on the strategies on how to achieve success. The same goes for investing. It is crucial to dispel your myths of investing because it acts as a foundation before you can start utilizing any strategies you learn along the way.
Learn from your mistakes
I speak this from my own personal experience. In my initial years as an investor, my mood would swing together with the fluctuations in the stock markets and I had no clear vision of what I was doing at that time. I realised that even though I practiced value investing, I did not have a long-term mindset. I would be in a hurry to lock in profits, and missed out on the returns that came with long-term investing.
Everyone is bound to make some mistakes along the way of investing. The important thing is to learn from them and become a better investor. I believe that someone new to investing should start by crafting out your own investment plan. By having a plan, it can prevent you to fall through the cracks during tough times and help you stick to your own investment goals.
It is always difficult in taking the first step towards learning something new. Here at the Motley Fool Singapore, we are dedicated to help investors like you on how to take control of your money and make better financial decisions.
We wish you all the best on your investing journey.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor James Yeo doesn’t own shares in any companies mentioned.