Is Stock Market The Quickest Way To Become Rich?

Based on my latest reading on Malay Mail, Social Security Organisation (Socso) Employment Insurance Service (EIS) states that workforce attrition in Malaysia has risen by 42% year-on-year for the first quarter of 2020 due to the COVID-19 pandemic. Thus, making the retail investors to slowly move into the stock market because they thought that would be the quickest way to earn money. This shows how financially unstable everyone is. People are struggling to survive since the Movement Control Order (MCO) was implemented on 18 March 2020.

There is no ideal time when to buy stock in a market crash because no one knows the bottom of the stock market.
Global stock markets have been unpredictable since the World Health Organisation (WHO) announced COVID-19 outbreak as a pandemic on 11 March 2020. The world has seen a plunge in the stock markets like never before. Who could have predicted this? As Berkshire Hathaway CEO Warren Buffett once reiterated, “You can’t predict the market by reading the daily newspaper.”
Source: Image by Gerd Altmann from Pixabay

Stack Up Our Knowledge On Stock Market

The terms “money market” and “capital market” are no longer inconversant to me, a third-year student in Bachelor of Business Administration (Finance). To be in the stock market where everything revolves around money, profit and loss surely has their perks. This also encompasses how to read a stock chart which I learnt under the subject of Technical Analysis. Ironically, learning about the stock market during a pandemic seems hapless. Because I might have to wait for another catastrophe to happen to apply some tricks and tips.

Buying financial securities such as bonds and stocks isn’t that easy. This is because fresh graduates need to have sufficient knowledge prior to venturing into the stock market. For instance, one needs to know how to diversify a portfolio and when to buy shares. Furthermore, investment skills and a strong foundation of investment are a must, or else it could lead to losses. Having good financial planning skills does help in some ways. But further enrichment classes in investments and stocks are helpful to boost one’s understanding on the subject matter.

One of the new normal for student is to sit for test while having to switch on webcam.
The new normal for us students and lecturers can be seen in this photo as we were answering Technical Analysis’s test while being monitored on Google Meet.

There are numerous ways such as reading books, articles, and financial portals to enhance our knowledge in this field. But mind you, it won’t be the same as having a teacher to guide us every step of the way. This will indirectly help us to manage risks, thus making the right investment decisions. So if you’d ask me I’d choose to invest a bit by attending seminars or personal classes and learn from investment professionals. Plus, having a piece of extra information about stocks and commodities won’t hurt.

The Stock Market In Malaysia During Pandemic

The COVID-19 outbreak has not only hit the tourism industry due to travel restrictions. Even the global stock market performance has also become volatile ever since. Thus, resulting in the 2020 stock market crash on 20 February when it was still an epidemic. A crisis is not always a threat as I mentioned in my previous article. In fact, the global healthcare sector stocks soared tremendously in the fight to combat coronavirus.

Those who wait for the stock price to fall more from the high keep waiting for it to go further down so that they can buy even cheaper. Which really never happens.
The challenge is neither the high is known nor the low or bottom of the stock market can be predicted..
Source: Image by Jcomp from Freepik

Initially, the FTSE Bursa Malaysia Kuala Lumpur Composite Index (KLCI) experienced a downtrend in the beginning of January 2020. It recorded the lowest point of 1,219.71 on 19 March 2020 which was also the second day of MCO. KLCI subsequently slowly returned to 1,400 points and currently 1,500 on day’s range. The selling price of healthcare companies such as Top Glove and Supermax remain high as COVID-19 pandemic has not shown any signs of slowing down.

Experts Advice On Investing During Pandemic

Along with the opportunities that the stock market provides, there are certain risks that come along with it. Nonetheless, if the risks are calculated and decisions are made after proper evaluation, then investing in stock provides a good opportunity to increase net worth. A heads up from Warren Buffet’s advice on CNBC is to write down exactly why we plan to invest in that particular company. With that, investing in companies with good performance that offer long-term value should be the first criteria. There’s a chance we’d end up selling our stocks when the market drops hence the importance of fundamental analysis. Despite that, Sallie Krawcheck who is a former Wall Street executive and now the CEO of Ellevest, says that buying pharmaceutical companies’ shares at this trying time won’t end well because we have already missed the boat.

Will stock prices soar after the pandemic ends? Definitely! But the question is, when will the price soar, or worse, when will they crash? In the 20-30 years after the pandemic has ended, I am certain that the broader market will rise quickly and by a great margin. However, I’m also game to say that it will fall dramatically in that same period or perhaps a little longer.

The stock market is a device for transferring money from the impatient to the patient.

Warren buffet, CEO OF BERKSHIRE HATHAWAY

Bursa Market Place Is The Easiest Exposure For Stock Market

Many young executives and fresh graduates claim that living expenses are increasing faster than their salary increments. Hence leading them to try alternatives including investing in stocks. The catch is, many don’t even know where to start. So, if you are keen on investing but don’t know where to start, Bursa Market Place is the perfect medium for you!

Investing in Malaysian stock became easier with the launching of Bursa Market Place by Bursa Malaysia Bhd in 2014. It is a fully integrated exchange board providing a complete range of exchange-related services including trading, clearing, settlement and depository. On the bright side, it is completely free for public use. Honestly, there is no better way to learn in the world of investing, than by investing itself.

Do not get carried away by the stock market hot tips from a person or a website. You don't need to check your stocks regularly.
The simple rules are to invest in companies that you know, you like, and what you think are great companies in your opinion. Don’t blindly follow anyone.
Source: Image by Adam Nowakowski from Unsplash

“I Want To Make A Lot Of Money, Fast!”

I believe that the mentality of, “I want to make a lot of money, fast!” is the wrong mindset to have in the stock market. Being a go-getter, Rosli Sulaiman agrees that it is almost guaranteed to lose money in this field. You could get lucky but if you rely solely on luck alone then you’re done for. Truth is, there is no best timing to buy stocks. It’s more about the stocks you buy, so identify undervalued stocks. One thing for sure is that we should never mimic what others are doing and follow the trend.

Rosli Sulaiman
With a Master in Business Administration (Finance), Rosli Sulaiman is the right person to turn to for financial management consulting services.

Rosli has been working as a financial planner for the past 15 years. He laments that there are many young people who couldn’t care less about money management. He adds that some people even invest in stocks while living on a tight budget. His advice is to save money first and when the right time comes, then only begin to invest.

Investing in the stock market involves high risks but with knowledge and skills, they surely can be minimised. If you wish to start investing after you graduate, do contact Rosli Sulaiman personally at +6019 335 3518. He is more than happy to help.

Do you think it's the right time to invest during a pandemic?
Sarah ZAINAL

About Sarah ZAINAL

Finance major, with a secret love for linguistics, Sarah grew up reading, writing, storytelling, and even dabbling in poetry too. A hardworking lass who loves to learn new things to soak up new experiences.

2 Replies to “Is Stock Market The Quickest Way To Become Rich?”

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