Money remains one of the most essential assets people own
As more individuals continue to explore investment opportunities to grow their income and protect their savings, financial experts are advising prospective investors to understand key fundamentals before committing their money.
Money remains one of the most essential assets people own, as it is used to acquire goods and services that satisfy needs and wants. As a result, investing carries varying degrees of risk, with returns never fully guaranteed.
Speaking on BizTech on GhanaWeb TV, Financial coach Benjamin Anane Asamoah explained that investing in stocks is a long-term commitment.
He noted that while stocks offer the potential for higher returns, they also come with risks that investors must carefully consider.
“There are a lot of risks, but first of all, if you are looking at the long term, if you are going into stocks, you have to think long term. If you are going in for the short term, know that you might lose something. But if you are looking at long-term growth, then the stock market is the best place to be,” he said.
He also shared practical tips for potential investors seeking to enter the stock market.
Here are five tips to consider before investing in stocks:
BizTech: Understanding Ghana’s stock market and how to invest
1. Start with basic education
Always research the investment instrument you intend to pursue. Anane Asamoah emphasised that understanding how an investment works, the expected returns, and the potential risks involved should be the first step.
2. Consult a professional (broker)
He advised that investors cannot simply walk into the stock market and buy shares. A licensed stockbroker is required to properly assist with purchasing stocks.
3. Start small
Asamoah stressed that stocks are not a form of gambling. He recommended starting with an amount within your budget, using surplus funds rather than money needed for daily expenses or emergencies.
4. Focus on long-term investing
Market prices can be volatile in the short term. He recommended adopting a long-term approach, allowing investments time to grow and recover from temporary downturns.
5. Diversify to reduce risk
He explained that putting all your money into one stock or sector increases risk. Spreading investments across different companies and industries, he said, can help cushion losses if one investment performs poorly.
SP/MA
Watch the full interview below:
