One of the very first things I do when I get out of bed in the morning is to read the newspapers just before breakfast to keep abreast of the latest developments not only within Singapore, but also around the world (yes, I always like to ‘feed my brain’ before my stomach.)

Among the articles I’ve read today, one of them in particular caught my attention (and you can click on the link below to read the article in full):

“Seven victims lose more than $1.45m in stock-buying scam”

Wow… $1.45m. That’s a lot of money indeed. One of the first things that probably come to mind, especially if you are new to trading and/or investing is that, ‘it is very risky activity.’

Is it really so? Of course it is, if you jump right in without first knowing a thing or two about it! As such, in today’s post, I’d like to share with you some of the things you really need to know (and do) so that you do not become part of the statistics (of such scams):

1. Always Invest in the Right Education

Just like when you were a kid, would you dare to dive into the swimming pool if you know nothing about swimming? Of course not, because you will probably drown!

BUT, if you have an instructor to hand hold you and teach you the basics of swimming, then will you dare to get into the pool? I’m sure you will.

The same goes for trading and/or investing – NEVER go right into it without first equipping yourself with the proper education, or the basic know-how to do it.

There are lots of books out there in the local bookstore that teaches you the basics of trading and/or investing. Or if you do not like to read, then there are many video courses available on the Internet you can purchase to learn the nuts and bolts about it – but before you make the investment (some of these course can cost quite a bit), you may like to do a Google search to review other peoples’ thoughts about them – while this is by no means a foolproof way to separate the wheat from the chaff, but at least in spending some time to do some basic searches like this will allow you to filter out the downright lousy ones.

2. Never Make Your Trading/Investing Decisions Purely on ‘Hearsay’

Would you blindly give your money to a complete stranger on the street who blatantly ask you for it? If not, then why would you want to put your money into a company where you do not have the slightest clue about?

One of the most dangerous thing to do to blindly put your hard-earned money into a company simply because people around you are doing it. This is one sure way to lose all of it.

So what so you need to do? This brings me to my third point…

3. Always Do Your own Due Diligence Before You Make Any Trading and/or Investing Decisions

The right thing you should do before you decide to put your hard-earned money into a company is to first conduct some basic researches about it.

Personally, I only put my money (whether is it for trading or for investing) in companies I have a good knowledge of – and that includes first gaining some understanding about its business operations, its financial performance over the last 3-5 years (to make sure that it is growing steadily, and not declining), as well as its debt profile (to make sure that it is not taking on an excessive amount of borrowings.) You can find out such information from the company’s annual report – every listed company have an ‘investor relations’ page and you can locate it simply by searching for the company’s name as well as adding in the words ‘investor relations.’

4. Be Aware of the Fact that You Can Never ‘Get Rich Quick’ from Trading and/or Investing

I’m sorry to break your heart but, the truth is that you can NEVER ‘get rich quick’ from trading and/or investing – think about it, if one can make millions of dollars overnight, then why would there be people still toiling so hard every single day over living expenses?

As such, if someone tells you one fine day that you can make lots of money overnight in a single trade, it’s most likely it’s a scam, and you should walk away from it.

Just like in everything that you do, if you want to be very successful from trading and/or investing, then you need to spend lots of time to first getting the right knowledge to learn about it (I’ve explained that in the first point above), getting your feet wet by either first paper trading (meaning executing trades without using real money, and some brokerage platforms allow you to do it), or putting minimal amount of money to get some real-life experience, and along the way, make tweaks to your process to improve your return on investment (or ROI for short – meaning the amount of profits you make for every dollar you put in.) Once you have gotten some experience, you can consider to increase the amount of money in a single trade and/or investment.

Sounds like it’s going to take a lot of time? Yes it is. It’s the same with achieve success in anything in life, you need to put in lots of hours of hard work to have a chance of eventually achieving it.

Closing Thoughts

I hope the above helps address some of the key concerns you may have regarding trading and/or investing.

If you have any questions regarding the above, or about trading and/or investing in general (and think that I’m able to help), feel free to reach out to me here.

With that, I’d like to wish you the very best in your trading and/or investing journey – always remember, success never comes before ploughing hundreds (or even thousands) of hours of hard work.

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