How to Invest in Stocks in Saudi Arabia: A Beginner's Guide for Getting Started

If you have never invested in stocks before, it can all seem a little overwhelming. There are so many options available, so many people giving you advice on what you should and shouldn't do, and, of course, the unpredictable nature of the market itself. 

No one wants to take the time to demonstrate how to invest in stocks for beginners; they just want to get you investing in their project as quickly as they can. But we're here to help. Here are a few essential pointers to get you off to a good start.

Know Exactly How Much You Have to Invest

No one invests in stocks to lose money, but if you want to make this a long-term project rather than a flash in the pan, you will need to have a clear idea of your budget. Before you commit to investing, set aside an amount that you will not deviate from and know exactly how much you can afford to lose.

Do Your Research

If a friend asked you to invest in their business idea, you wouldn't just say, "Sure, how much do you need?" You would ask them to define exactly what their idea is, what their plans for the future are, and what the potential risks and benefits of your investment would be. 

It's the same with investing in stocks. You need to make sure that you have done your due diligence and understand the risks that you will be undertaking.

It's also important to have a clear idea of the areas you might be interested in investing in. Real Estate is always a popular choice, or maybe you want to be investing in the cutting edge of future tech with robotics. Having a clear idea ahead of time can save you time and stress down the line.

Find A Financial Services Company That You Can Trust

If you're diving into the world of stocks for the first time, you are going to find that there are a lot of businesses out there that are telling you that they know how you should invest your money. 

Of course, some of these firms will be better than others, and it is really important that you choose a financial services company that is both well-connected and trustworthy.

If you're looking at investing in stocks in Saudi Arabia, the award-winning Alkhair Capital offers an incredible range of products and services that are compliant with Shari'ah law, and they are connected with a range of Islamic finance hubs.

Make Sure You Can Stay Connected and Safe

Some people who invest in stocks simply want to put their money in and leave it, like a bank deposit accumulating interest. If you really want to make the most of your investment, you will need to make sure that you can always get the latest updates and react as quickly as possible.

But you are also going to want to think carefully about safety. With rising cybercrime statistics across the world, you are going to want to know that your assets and your personal information are secure. A digital wallet like Quara Pay is a great example of a must-have finance tool for anyone conducting business online.

Alert! The 5 Worst Mutual Funds Money Can Buy

When it comes to money & markets, making investments is an important part of that economic system. It is vital when entering into the world of investments to learn how to choose them wisely, not only by learning what good investments are, but also learning what are very poor and dangerous investments. 

While it’s easy to rely on investment advisors to provide advice and help manage your portfolios, it’s critical to perform your own due diligence. Bad financial advice is generally chalked up to two specific reasons – self-interest and the advisor’s lack of performing due diligence. Both kinds of poor financial advice comes with its own consequences in the short term, but down the road, they will both result in poor performance or loss of money.

While mutual funds should be part of every investor’s portfolio, not all are created equally. Below is a list of 5 of the worst mutual funds you can invest in this year.

1. The Fairholme Fund

Fund manager Bruce Berkowitz endangered this fund by taking a bet on the recovery of Bank of America, St. Jones, CitiGroup and AIG. Unfortunately the bet was the wrong one to make, as now this fund has lost more than 35% year to date vs a loss 7% for the S&P 500. Close to $10 billion have poured out of this fund over the past year, proving that past performance does not predict future performance.

2. Franklin Gold and Precious Metals Fund

With gold being in the free fall that it is in, and the slim prospects for inflation on the horizon, it's no wonder that this fund is one of the worst investments that can be made. The Franklin Gold and Precious Metals Fund has lost over half of what it is worth since the beginning of the year, with a YTD return of -53%.

3. Diamond Hill Long-Short (DHCFX)

This fund has an equity with 1.00% of the load and a 2.56% ratio, so no matter what the market does, each investor will lose 3.56% of their principal. It has also trailed the S&P 500 and underperformed it by over 16% over the last 5 years, which is a big deal when over 3% of your investment is going just to pay for the fund.

4. Federated Prudent Bear Fund

One easy way to determine how a bear fund is doing is to look at the market: if the market is doing poorly, you can rest assured that the bear fund is doing poorly. And this one is no exception. With a YTD return of -13%, and the average return for the past 3 years being -16%, this is not a wise fund to invest your money into.

5. Fidelity Magellan

Despite how poorly this fund has consistently performed, many investors continue to stick with it. Trailing the S&P 500 over the past 1 year through 15 year rolling periods, and with $17 billion in assets under management, this fund has done so many things wrong that there is a wonder what a loyal following it continually has.

What Type of Retirement Account is Right for Me?

When starting their careers after school, new members of the “real world” are likely given some options to invest their money. This can be multiple different avenues, and many of them can help prepare for the future. If retirement is on a person's mind, they may want to look at a couple of choices to help strengthen their financial strategy.

We at World Financial Group know that individuals need to think about retirement starting at an early age. This can be a tricky process, but there are many options available to help people achieve their goals. Starting early is important, and it can prevent delays in a person's fiscal plan later on.

Planning for retirement necessary from the get-go

Everyone wants to retire comfortably, but there may be some issues on how a person will accomplish those goals. By setting a strict plan from the time a person is getting into the working world, it can improve the chances of retiring on time.

• Start saving now – There is never a point where it is too early to start putting money away for retirement, and delaying this process can hurt the chances of getting it done. 
• Know what is needed – Having set goals are only as good as the likelihood an individual can reach them. Saving a set amount and working to increase that level gradually may put the person in a better spot later on. 

Not all retirement accounts made equal

Young people need to look at a variety of retirement options, and considering these choices should be a long process. When finding the right type of plan, a person can adjust their strategy to ensure they are in the best position to save a sizable amount of money.

• Roth IRA – One of the best aspects of having a Roth IRA is that all withdrawals of the account are without any tax penalty. There are still some tax contributions, but the money taken out belongs to the person who owns the policy. This policy also allows for withdrawals before a person retires without a penalty, which can be beneficial if the account holder needs the money. 
• 401(k) – This policy allows for an individual to work with their employer in order to build their retirement savings. If account holders put a certain amount of their paychecks toward this account, they may be able to get their employers to match their contributions – thus providing a nice boost to their savings. 

These available options can help a person get the tools they need to retire successfully. However, these may be even better if a person combines them with other diversified savings plans such as a nest egg account and a college fun for any children they may have.

Investing in Your Future

A great way to boost your bank balance in the build up to your retirement is to invest your money. The advice for mature investors remained the same for many years; focus on assets that will guarantee a safe return, rather than those that offer the biggest capital or growth potential. In recent years however, people have been taking note of the fact that people are living longer; therefore opening up a whole load of other exciting investment opportunities for retired people, as longer investment times mean a better chance of risks eventually paying off. Whether you want to play it safe or take a chance, there are a number of different ways you can invest your money later in life besides just placing it in a savings account. 

Bonds

Purchasing a bond involves the lending of money to a business or government which they will pay back with interest. This is definitely an option for the safety conscious as investing with a well-established, reputable company or official organisation more or less guarantees a return on your money. Profits may be limited but the stability of your money and often quick return times make it a great asset for a mature investor’s portfolio. 

Stocks

Buying stocks (also known as equities) essentially gets you part ownership of a business. You gain the right to vote in shareholders’ meetings and you benefit from shared profits that are distributed amongst owners – referred to as dividends. This is a great option for the more adventurous investor, as stocks are high risk assets with the potential for great rewards. Nothing is guaranteed with the purchase of a stock; its value can fluctuate daily, meaning your investment could flourish and soar just as easily as it could plummet. 

Gold

The value of gold is more stable than most currencies and even increases as the US dollar decreases in purchasing power; acting as a great remedy against inflation. There is a growing level of supply and demand for this precious metal and so your purchase will never be wasted. There are also a number of different ways to buy and sell it, from online brokers to jewellers and government mints, with many others in between. With growing interest and value guaranteed, investing in gold – and digging out any old family heirlooms – can be a great financial opportunity to utilise upon your retirement. 

Online Investments

The internet has made finding suitable investments a much less daunting task. Sites like Nutmeg allow people to invest anything from £1000 upwards and a team of professionals will split your money between assets to reduce risk. This is a great investment opportunity for those who want an easy retirement with a bit of extra cash, as the Nutmeg team monitor and move your money to capitalise on the success of certain areas and avoid weaknesses in others. You can be as distant or involved as you want and there are no fixed terms; your money is yours to withdraw whenever you want.

Gone are the days when the only way for a retired person to boost their money was to stash it away in a savings account. The world of investments has truly opened up and can finally be accessed and utilised easily, regardless of age.

Julie runs financegirl.co.uk, a finance blog which aims to bring the best online finance news into one place as well as offering money advice and tips for savvy consumers. A regular contributor on finance blogs, she can also be found @financegirluk.