So you have started earning money and have managed to begin saving too? That’s great! Now you want to begin investing but are on the fence because it seems like it won’t be an easy thing to figure out? Well, you’re not entirely wrong. You must begin, nonetheless. However, it’s best to know the hurdles you may possibly face so that you’re not blindsided. Furthermore, knowing the best ways to get past them will equip you with a toolkit to tackle these hurdles. Here’s what you need to know:
- Lack of knowledge
It’s common for beginners to make investment decisions without fully understanding the risks involved or the kind of returns they can expect. Without knowing what factors affect the market and move the stock prices up or down, when to exit an investment, and why or how to diversify, many early investors lose money when they get started. Often, this makes beginners overcorrect by blindly following their peers’ investment strategies, or give up on investing altogether.
It’s essential to get through the growing pains and not give up before you even get going. However, you don’t have to make investment decisions all by yourself. Appreciate offers personalised recommendations and investment strategies depending on your financial goals and needs. So you can find all the education and guidance you need to make informed investment decisions and successfully build your wealth.
- Having limited capital
At the beginning of your financial journey, you may not have huge amounts of money to put towards investing. With limited capital, you may feel like your options are also limited or that you have to wait until you have a certain amount to invest in securities of your choice. But that doesn’t have to be the case.
Say you’re interested in investing in Amazon because of its exceptional returns but you don’t have the $3,372 (or ₹ 2,52,659) it takes to buy one Amazon share on you right now. You don’t have to wait until you save that or put whatever money you do have towards stocks that you don’t feel so thrilled about. Instead, you can consider fractional investing that involves buying a fraction of one share, allowing you to include your desired stocks in your portfolio. So, if you have ₹1000 right now, you can sign up on the Appreciate app and choose from over 6000+ stocks listed in the US stock market irrespective of the cost of their shares.
- Lack of portfolio diversification
When you’re just starting out, understanding even one asset class or making even a single investment decision may take a lot of time and thought. Hence, many investors either put off portfolio diversification or are not even aware of it. Diversifying your portfolio essentially means dividing your money into different assets so that the risk of the investment is spread out. How you choose to allocate your money between different assets, such as stocks, debt instruments, gold, etc. primarily depends on your financial goals and risk appetite.
Building and maintaining a diversified portfolio doesn’t just require a certain level of financial knowledge but also constantly tracking the performance of different assets. But with Appreciate, you can receive regular AI-based recommendations that help you maintain a balanced portfolio that’s in sync with your goals at all times.
- Letting emotions drive decisions
It’s easy to invest based on your emotions or ‘gut’ feeling as a beginner. That’s because when you don’t know what financial parameters to gauge before making an investment, it’s natural to make decisions based on what feels right to you at the moment. This also leads to a myopic view that makes you lose sight of your long term strategy. You may be inclined to make decisions based on the short-lived market sentiments of panic or euphoria.
It helps to have a trusted financial source that is objective and free of bias. And that’s something only possible with AI technology. Appreciate’s algorithm tracks the market and provides real-time updates so you can make the right decisions at the right time. This helps to minimise market volatility and losses and maximise opportunities.
Don’t let these hurdles discourage you from starting or moving ahead in your investment journey. Every investor has to deal with them and it’s important to remember two things: Take all the help you can get and remember that you’re going to learn along the way. Signup here now!
