Getting Started with Investing for Beginners: Learn 11 Tips You Should Know Before Investing

Many people think that investing is complicated and risky, leading to potential losses. But in reality, if you understand the principles and choose the right methods, it’s not as difficult as it seems. This article will introduce you to What is investing and the various types available around us, so you can find opportunities to grow your assets strategically.

What is investing? 11 Types you need to know

1. Stocks (Stocks) – Buy a share of a company
2. Bonds (Bonds) – Provide capital to organizations and governments
3. Mutual Funds (Mutual Funds) – Pool money from many investors
4. ETFs (Exchange-Traded Funds) – Funds traded like stocks
5. Certificates of Deposit (Certificates of Deposit) – Long-term deposits with fixed interest
6. Retirement Plans (Retirement Plans) – Save for post-retirement years
7. Options (Options) – Rights to buy or sell in the future
8. Annuities (Annuities) – Receive steady income over the long term
9. Derivatives (Derivatives) – Contracts based on underlying assets
10. Commodities (Commodities) – Invest in energy, metals, and agricultural products
11. Hybrid Investments (Hybrid Investments) – Combine multiple assets

Starting with stocks: A beginner’s profit path

What are stocks?

When you buy stocks, it’s like owning a part of the company. Profits come from two sources: capital gains (Capital Gain) when stock prices rise, and dividends (Dividend) from the company’s profits.

How to make money from stocks: Two approaches

Technical analysis looks at price chart patterns to find good buy/sell points. For example, buying Tesla (TSLA) at $200 and selling at $270 yields a $70 profit per share.

Fundamental analysis considers stocks as representing the company’s profits. If the company grows, stock prices tend to increase long-term. This approach requires reading news, earnings reports, and financial ratios.

Beginner steps

• Learn and study: Read books and articles on stock analysis, regulations, and strategies
• Create a plan: Decide which companies to invest in and for how long
• Choose a broker: Find a securities firm with reasonable fees
• Start investing: Use your knowledge to manage your portfolio and learn from real experience

Bonds: Light investment with steady returns

Bonds are like “loans” that you buy, making you a creditor to the issuer (government or companies). Returns come from two parts: fixed interest (Coupon) paid periodically, and capital gains if you sell at a higher price than purchase.

Example calculation

Investing 1,000 THB in bonds with a 5% interest rate for 3 years will give you:

• Annual interest: 50 THB
• Principal amount: 1,000 THB (returned at maturity)

How to choose bonds

• Understand types: Know the differences between Government Bonds and Corporate Bonds
• Assess risks: Safer bonds have lower interest; riskier bonds offer higher interest
• Match your goals: If you want regular income, bonds are a good choice

Mutual Funds: Invest in groups, no need to know much

Mutual funds pool money from many investors, managed by a fund management company (fund manager). The advantage is low investment amount, good returns, and no need to manage yourself.

How to earn

• Use as savings: Earn more interest than a bank account
• Choose suitable funds: Various types available (equity, bonds, mixed)
• Tax benefits: Some funds (SSF, RMF) help reduce taxes
• Dividend income: Some funds pay regular dividends

Starting steps

• Learn about types: Equity Funds, Bond Funds, Balanced Funds
• Select a fund: Align with your investment objectives
• Open an account: At a bank or fund management company
• Monitor regularly: Adjust your portfolio as needed

ETFs: Funds traded like stocks

ETF (Exchange-Traded Fund) is an index fund traded on the stock exchange in real-time, such as tracking the S&P 500, commodities, or bonds.

How to profit

• Price difference: Buy low, sell high
• Dividends: If the ETF tracks stocks, dividends are paid from companies

How to start

• Choose an ETF: Based on your investment goals
• Open an account: With a broker or investment platform
• Buy and monitor: Check performance and adjust as needed

Certificates of Deposit (CDs): Lock in money with fixed interest

CDs are assets where you deposit money for a period (3 months to 5 years) and earn fixed interest. The downside is you cannot withdraw early without penalty.

( Example comparison

Regular savings account: Withdraw anytime but with lower interest
CD: Lock in money longer, earn higher interest

) Starting steps

• Understand the term: Longer lock-in yields higher interest
• Compare rates: Different banks may offer different rates
• Decide to lock in: Only if you’re sure you won’t need the money during the period

Retirement plans: Prepare for your golden years today

Retirement plans help ensure you have enough money for post-work life. Planning involves calculating how much money you need.

Basic calculation formula