THREE THINGS that should be considered before investing! It's simple but many people FAIL to do it!

 After getting in touch with investment, dream investors often go to various webminars to get information. In a webminar hosted by Stashway, Co-founder Freddy Lim shared about Investment can be very complicated, but simple thinking can also be used to understand investment. He shared that there are three important points to keep in mind when investing. He wrote these three points where he could see them every day, always keeping them in mind.

1.CASH

Investors must do a good job in asset allocation, do not pump all your money into investment. Make sure you have enough cash flow to cope with life expenses. Invest in extra "free money," which means you won't need it in the next few years. Because investment is a long-term process, this process can make money but also face losses. This is to prevent you from selling investment products such as funds, stocks, etc. for cash at a loss because you need money urgently. When you invest your money, be prepared for a long war and wait for your wealth to grow and accumulate, which may take several years. 

2.RISK 

 We invest to increase our wealth, but more importantly, to counter inflation. There is no always up and down in the stock market, investment can make money or lose money. Some people panic and sell to cut their losses when the market falls 10-20%, while others remain calm and add to their investment when the market falls 30-40%. They take it as "discounts". 

 Before investing, investors must ask themselves:  How much risk can I handle? How much loss can I accept? How long can I hold it? Consider time period you can hold.

Mr Lim added that a 20-30 per cent decline in the stock market is normal in a bull market cycle. Because the stock market has gone up too high, there's a sharp decline due to market correction, that's a healthy market. Just as our stock market is doing right now,

So, don't shout, "The bear is coming!" when the stock market falls to 30%. Fear mongering! 3. DIVERSIFY Diversification of risk means investing in different countries, or in different types of funds or sectors. Building a portfolio of diversified risks is like building a large, stable ship that is not afraid of storms and waves in stock market !

Funds investing in China and technology stocks recorded good return last year because of the COVID19 outbreak. So this year everyone rushed to buy the hot fund and hoping to earn money! In reality, tech and U.S. stocks slumped in volatile trading with the tech-heavy Nasdaq heading for its worst week since this years.

Thus, investors who investing in China and technology related stock/ funds lost money instead of gaining money. On the other hand, less attractive sectors such as Japan and European stocks recorded a rise. Looking at the bright red portfolio, a YOUNG/NEWBIE investor will be confused. My investment is to increase my income, but it has unexpectedly become my biggest expenditure. 😭 😭 😭 This is also a lesson learned by dream investors, do not hear that a certain area is very promising, very hot and believed to have good return. Then, everyone rushed to buy it , fell then everyone cried together! Welcome to Like and Follow Facebook - Dream Investors. we will share useful information on generating passive income! If you have any questions, you can ask us on Facebook or email me. We'll be happy to answer them for you! 😊