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    January 28th 2020investing, Investment tips

    ABCs of investing: What to know when starting out

    Confused about the how to invest? Here is what you should know before you start.

    Dubai: It’s this time of the year when many people wonder whether they are making enough money and if more can be made with what they already have saved up.

    Most experts will tell you that, if you’re saving money for a goal but do not need the cash for at least five years or so, you should be investing that money.

    If you have been wary about investing, market experts advise newbie investors that there is no time like the present.

    Start early

    One should start investing as soon as they can.

    Unfortunately, many people are afraid to invest — usually because they don’t know how to get started. Experts suggest that investing when you’re young is one of the best ways to see solid returns on your money, thanks to compound interest, which is when your investment returns start earning their own return.

    Gulf News spoke to a couple of investment professionals with nearly two decades of field experience who had advice to offer investors and who are planning to invest for the first time.

    Anita Yadav, a seasoned markets expert with experience in diverse financial markets, and Nisarg Trivedi, a Middle East director at Schroders Investment with expertise in wealth management, shared their thoughts on the first steps a new investor needs to take.

    Start investing now?

    The answer to when you should start investing is simple — as soon as reasonably possible.

    “Any time is the right time to start investing. The best time to invest was yesterday, as we all say. If you haven’t started your investments, you should start it now,” Trivedi said.

    He suggested that the earlier you start, the better, while adding that the longer investments stay, the more returns you will make out of your investments.

    “The right time to start investing was in 1984,” Yadav jokes. “So if you missed 1984, then it is today. The best time to start investing is as soon as you can. People underestimate the time and value of time when doing investments, so the sooner you start the better it is.”

    But this is assuming all of your high-interest or any credit card debt has been paid off and you have an emergency fund set up to provide essentially a minimum of three months’ basic income in case of emergency.

    If you pass those two tests, you should start investing now — whether you are 12, 32, or 52 years old. There’s almost no way your future self will regret making the decision.

    When starting out

    “When you are starting in the world of investments one thing that is very important for you is to know three things”, which Trivedi described in the form of a travel analogy.

    Firstly, your starting point is where you want to begin your investments, while also planning what sort of money you would get after investing for a period of time.

    Secondly, what is your destination? Or, what route do you want to take to reach your destination, i.e. reaching the final targets of return?

    Lastly, there is the final destination i.e. how much you want to make or what is the final returns on your investments.

    Keep at it

    Anita Yadav stressed the most important reminder for a first-time investor is that investing is not a “one-off exercise”.

    “It’s not like you invest and you set it aside and you forget — that’s a dead man’s strategy,”

    Investment is a continuous process of building a portfolio, of monitoring it regularly, and managing it.

    “So you have to understand and keep aside some time if you really are serious about creating money from money — which is what investing is basically — and take extra effort in making sure you do it right.”

    Hold on to it

    It is highly recommended that any first investment should be held for at least a year, in order to avoid short-term capital gains taxes.

    Avoid high turnover or excessive trading early in your investment career; the costs associated with placing multiple trades, plus their tax implications, make it an unwise strategy for novice investors.

    All rights reserved to the initial publisher for gulfnews.

    Collected and published by propertyeportal.com editorial team. Get in touch with us at [email protected].