By Bhumika Ramesh

As the lockdown set in, a lot of people turned to online stock trading, investments and markets – evident of the fuel social media has given it. As access to buying and selling stocks becomes relatively easier – society has paved a simpler way to invest in them.

Nevertheless, before doing so, you can ask yourself a few questions to determine your stance in the process of entering the market.

1.Am I in a position to invest?

Before taking a step further, take a look at where you stand in terms of your budget. Take care of your debt (if any) and emergency funds. Work your way towards eliminating any pending credit and personal loans. Start focusing on building an investment-oriented strategy with your personal finances.

2. Is it a good time to invest?

Apart from taking a bet even when the economy seems low, it’s the for the best if you consider the present scenario before investing – although no guarantee can be made. The stock market is not necessarily unpredictable, but they do take turns for the worse at times. Do your research before jumping in.

3. Do I understand the basics of investing and the stock markets?

It’s important to understand the jargon and terminology you will be dealing with before you enter the field. You don’t have to be a pro, but having the basics on hand is beneficial. You can then take decisions with more understanding. And you don’t have to rush to google new terms every time they appear.

4. How much of a risk can I take?

A simple way to approach this is to understand as to what amount of money would you be comfortable in losing – stock markets are always in ups and downs. With the influx of several new companies and the ever-fluctuating cryptocurrency rates, it’s easy to be pulled into the charm of it all. Experiment cautiously and take your first few investments to secure industries.

5. Do you know what to invest in?

The market is vast, no doubt about it. You need to be familiar with the accounts you use and the funds you would invest in. Not everyone is an expert, but you need to have these fundamentals down before you go through the step of trading, buying or investing in stocks. If you want to take it solo, research along with a few trials and errors will be the course. Working with financial advisors is also good enough – they understand where you’re coming from, what your interests are and can help explain the market.

6. Why do I want to invest?

Instead of jumping on the bandwagon like everyone else due to FOMO, ponder over why you actually want to invest in stocks. It might come down to thoughts such as retirement savings or to generate passive income among others. Knowing the reason why helps you to stay on track with your strategy. As change is inevitable, be open to these goals changing as you navigate your way through the stock market. 

While beginning to invest, take it slow. Rome was not built in a day. There will be various questions that pop in your head when you venture out into the financial and economic world. With the answers you find, you get more involved. Investing takes time and research. We hope article helps you get started.