Financial Intelligence
If you had decided to invest in stock, you should know how to read annual reports and stock trading charts the least. Both are critical since you can know how profitable stock is in the short term as well as in the long run.
As for mutual fund investing, researching which fund performs the best historically, who is the fund manager behind the scene and what is the associate cost involved do not require financial knowledge that much.
While investing in stock directly can be rewarding, get started with mutual funds is not a bad idea.
Focus & Commitment
Blue collar employees or top executives can find themselves very busy to manage money on their own. Due to lack in time and other commitment than career progression, invest in mutual fund can help them growing their savings too.
However, committing 2 to 3 hours per day learning about stock and researching them is good enough to start controlling your financial future. Moreover, if you manage to find the niche strategy that you can use again and again, you can trade for a living and become financially free.
So, start learning stock investing whenever you have time.
Cash in Hand
You need a minimum of 6 months income or 12 months expenses in emergency fund before start investing in stock. And you need $10,000 minimum as the initial capital. The reasons are, stock market is unpredictable and effective fund allocation is required for optimum risk management.
This does not hold true for mutual fund though. You can put everything in preserving capital funds and allocate certain portion for high-risk high-return mutual funds. Nevertheless, balancing both preserves and growth strategy is crucial for maximum profits with minimum risk.
But, you can invest in mutual funds while waiting for undervalued stocks as well.
|
