Investing in the Stock Market
The Malaysian stock market is managed by Bursa Malaysia where there are hundreds of counters or stocks to choose from. When and how you invest pretty much determines the profit and loss of your investments in this market. Despite its volatility, investing in stock remain as one of the most common and very popular investment methods among Malaysians today as well as around the world. This is probably because of the quick returns and if one is lucky enough and have done their homework, the profits can be highly lucrative.
The most important element about investing in stocks is the risk involved. Compared to all other types of investment schemes like real estate and , the stock market offers the one with the highest risks where a profit can become a loss in a matter of minutes or even seconds and vice versa. Typically, there are many strategies that one can embark on when investing in stocks. Generally, there are 2 common ways to invest in stocks where one is for the long term and another for the short term.
Investing in stocks for the long term will minimize the risks involved as you will naturally buy the stock and then keep them until the price is better before selling them. In most cases, you can buy the stocks at the current market price but this can be quite risky because there would always be a possibility that the price might drop in the future. Another way to do this is to buy the stock at the IPO (Initial Public Offering) stage where the price is lower when offered than when it goes into the market.
This is where you can actually evaluate the financial and reputation of the company which is about to go public before deciding to buy their stocks. Once your purchase has been confirmed, then you would only need to wait for the price to appreciate before deciding to sell them.
Another method in stock investment is the quicker, hit-and-run method. This is where you buy the share and then sell them as soon as the price hits a certain stage. Investors adopting this style would usually buy the shares in volumes and then monitor the price. They will usually sell the shares when there are very small movements in the price as they are only interested in the small portion of profit. However, having bought volumes, they make up the numbers through the exponential amount. This is also a method which is used to cut losses where if the price drops a bit, they will immediately sell them off so that they will not lose too much and then regroup and target other shares.
One of the most important issues that one must consider when investing in stocks is to buy quality stocks and keep them. If they can afford, then they can play around with other stocks which can be traded as and when needed. Those who are investing in stocks using the fast and quick method must always be ready to take losses. This is because the market is very volatile and if the stock price starts dropping, then they must quickly decide to cut their losses and move their investment to other stocks. Furthermore, the instability of the stock market means that you will need to strategize and do your homework before going into the market.