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A wise man once said that true wealth is only able to be built when you stop trading your time for your money. Instead, when you start making your money work for you, instead of your time, you’re able to really start building wealth.
It makes sense. After all, if you can only earn with your time, then you can never earn while you sleep. Money, on the other hand, doesn’t sleep.
If you’re looking to get started on your journey to build true wealth, then you need to learn how to buy stock in Malaysia. The Malaysian market is a fast-growing economy, and early investment now will ensure that you hit it big when the market continues to succeed. To that end, we’ve written this article.
In this post, you’ll learn all about online stock trading in Malaysia
How to Buy Stock in Malaysia
Buying stock in Malaysia is similar to buying stock anywhere else. You first have to choose a broker and then decide what investments you will be pursuing.
The first step — choosing your broker — is a particularly crucial one. The wrong broker can have many unintended negative side effects.
If their fees are too high, then that will eat into your profits and kill your gains. If they fail to execute trades on time, then you could see yourself lose tons and tons of money.
And last but certainly not least, if you’re not dealing with a reputable broker there’s always a chance that you could be defrauded and lose a significant amount of your savings.
To avoid these unfortunate situations, there are several things to keep in mind. First, only work with a broker who has an established, positive reputation. If the broker can’t point to a plethora of happy customers who have used their services, then run.
Secondly, make sure that the investments that you make are significant enough that they will be able to continue making money despite broker fees. Break out your handy-dandy calculator for this step.
Last but not least, its important to also be cognizant of the legal implications of your investment. Depending on the country you live in, there may be limitations or extra taxation on capital gains from foreign investment. Check with the financial laws of your region to be aware of such regulations.
How to Build an Online Trading Income
Once you have found the right broker for you, it’s time for you to start stock trading in Malaysia. In this section, we’ll go over a few of the basics of building an online trading income where your money works hard and successfully for you.
Types of Investments
The first thing to decide on is what kind of equity purchases that you will be making. Your options aren’t limited to trading on the stock market. Instead, you could also consider other avenues like a private investment.
A small business that needs $10,000 to get started could easily realize hundreds of thousands of dollars of profits in the long run. If you invest early, then you could get a significant share of the company that will pay you profits as long as the company is operational. However, it’s important to remember that private investment is far riskier than other kinds of investment.
Another type of online trading you could do is forex trading. Foreign exchange is the currency market. Different currencies are always gaining and losing value.
If you are able to predict the trends correctly, simply by switching your funds from one currency to another you will be able to make significant gains in your portfolio. Forex Malaysia is a volatile market, which it is high-risk but also high-reward.
Diversify Your Portfolio
When you’re investing your money, it’s important to diversify your portfolio. Don’t put all of your eggs in one basket.
The reason for this is so that you are able to minimize losses while also taking advantage of high-risk, high-reward investment scenarios. For instance, let’s go back to that small business private investment that we discussed earlier.
If you invested that $10,000 and it was your entire savings, then if the business goes sideways you’ve just lost your entire portfolio. But if you invested $5,000 in the private investment and $5,000 in a safer investment, then even if the business goes down then you still have half your portfolio. And if the business goes up, you’ll still realize tremendous gains.
So be sure to diversify your portfolio with both high-risk and low-risk endeavors. If you are too risk-averse, then you won’t be able to realize significant gains. And significant gains are probably the entire reason why you’re trying to buy stock in Malaysia in the first place anyway!
Know When to Sell
Last but not least, another important thing to know is that you always need to know when it is appropriate to sell your investments and turn everything back into cash.
If all of your money is tied up in investments, then there are two problems. The first problem is that your money isn’t liquid. If a significant expense comes up like the bill from a medical emergency, then it might be prohibitively difficult for you to cough up that money.
The second thing to note is that entire markets are volatile. As the novel 2019 COVID-19 coronavirus pandemic showed, stock markets can take a tumble at any given point.
When you see big events like this on the horizon that could negatively impact the stock market, it’s wise to get out of your investments before you lose a bunch of money.
Build Wealth the Right Way
There you have it. Now that you know the basics of how to buy stock in Malaysia and be fruitful with online trading, you should be far better equipped to build true wealth by making your money work for you.
If you’re looking for more financial advice, then you’re in the right place. Be sure to check out the rest of the articles available to read on the website before you leave!