Shares – an integral part of your investment portfolio
The stocks are an integral part of your investment portfolio. They actually add the excess return beyond the basic and solid return (but they also express as stated risk). You do not always know that you are investing in stocks, but if you have a provident fund, pension fund, executive insurance, mutual funds, it is very likely that these are investments with a stock component, and rightly so – stocks are a very legitimate investment channel. But one should be careful and be aware of the risks. First, you need to decide how you manage and invest your money – independently and through a company that manages your money. If you decide to manage your finances yourself (and today it is already possible to manage most of the funds in this way, even the funds that save for the long term – for retirement) then in the first stage you need to determine your risk mix in the portfolio, which is a difficult question! Here, you can read about how to build your investment portfolio, and later you have to decide if you do it through index-tracking instruments (already detailed, but instruments like – ETFs and mutual funds that track stock indices, bond indices, etc., and the very spread Across the entire index, it is basically a risk reduction.) These instruments do not require a deep understanding of stocks, companies, financial analysis, understanding reading reports, and this is their great advantage, along with another advantage – low costs (extremely low management fees). – There is no active fund management, and the second approach is called (you guessed it) – the active approach – here, investors already choose their securities with tweezers, follow reports, announcements, competitors, customers and more, and here of course knowledge, experience and specialization are required. A small proportion of investors do it themselves – most of those who invest themselves do it through passive instruments
In any case, you need to make an effort to lower the commissions – if you work through a bank account try and lower the buying and selling commissions and it is possible to do so! You can also switch to stockbrokers or through brokers abroad, and through them manage the investment account – where the costs are lower!
A stock market is not a casino
What is an investment in the stock market? And is it some kind of gamble or casino? So, although many think so, the stock market is not a casino, and stocks behave, in the long run depending on their financial results. So it’s true that like many things in life – investing also has an element of luck – timing/timing of entry into the stock market is critical and so is the stock selection and the type of stock, but given that you act on the passive approach, according to research – stocks provide excess returns, and not only This – except that they provide an excess return at any point in time (in 30-year tests) even if the timing/timing of entry was not good. So it’s important to clarify – the last few years (last 5-7 years) are pretty tough for stocks, and yet – the conclusions of the long-term studies have remained the same – stocks provide a return. And it’s certainly not a gamble