Over the past few years, Asia has boomed as a region where investors can make money. Both China and India have seen massive growth in their economies, which means that investing in these countries is likely profitable.
There are several ways to make money as a trader in Asia, but not all of them work for beginners. Here are three investment strategies that beginners should consider using:
The safest option you’ll find anywhere is probably Japanese treasury bonds (JTBs). If you’re looking for something stable where you won’t lose any of your initial investment, then these are the way to go. Typically, they yield less than 1%, and you can be assured that your capital and interest gained will remain at par value. This means that you won’t lose any money over time due to inflation, and, as such, it’s seen as a very low-risk investment strategy.
Investing in gold signals an index fund would also be a good idea for those who don’t know where to put their money in Asia as of yet.
Exchange-traded funds are also excellent for diversifying your money in Asia. These can be purchased on exchanges like the NYSE or NASDAQ for foreign equities and bonds. By diversifying your investments across multiple countries and industries, you’ll limit your risk while simultaneously maximising returns.
The steps involved in successful investing for beginners
There are several steps involved in successful investing for beginners. They are:
Assess risk tolerance
Just because your neighbour makes 100% returns doesn’t mean that’s the kind of return you should expect or need, especially when you’re just starting. So how about taking our Risk Tolerance Quiz to get an idea of how risky investment would be for you?
Decide on asset allocation.
This is where you decide what percentage of your portfolio will go into passive investments (like index funds) and what percentage will be reserved for more risky investments, like individual stocks or commodities.
Find the best places to open an account.
Just because it’s easy doesn’t mean you should go with the first place you find online. For example, if you’re young and don’t have much money to start, certain companies offer attractive discounts on trading fees if you qualify.
Start building your portfolio.
Build your portfolio or create one if you haven’t already. But whatever you do, don’t take random bets in hopes of striking it rich overnight. It may seem like fun, but the research you’ve done up to this point has been designed to minimise risk and maximise your chances of success.
Stay informed about current events.
This doesn’t mean you have to spend hours following Bloomberg or Reuters each day. But keep an eye on significant indices (like the NASDAQ), world markets, and online publications that focus specifically on finance news.
Don’t “time the market.”
This may be the most challenging thing for beginners to do, mainly if you’ve just found out about an exciting new IPO that promises to skyrocket overnight. But don’t let your excitement get the best of you. Remember that long-term investments are usually your safest bet, not short-term gambles aimed at making a quick buck.
Prepare for some speed bumps.
Even when well informed and following a sound strategy you are investing in, it is still a risky venture. Remember – even the best investors in the world have bad days and bad weeks every once in a while. From unforeseen political turmoil to natural disasters that can affect supply chains, there are just too many variables to account for everything that happens in the markets on any given day (or more extended period). Do not get discouraged when you see your portfolio go down instead of up after an anticipated spike.