Opinion: How to invest in your own knowledge from 1 R$?

The biggest secret of making money with investments is to know yourself. However, knowing yourself and using your savings as a learning tool can seem a little daunting.

Everyone says investing is complex. Either because they can’t make money, because they think it’s risky, or because in technical terms (the so-called “economics”). However, investing may be simpler than it seems. And yes, it is possible to invest from R$1.

But the coolest part of all of this is taking advantage of this opportunity as a way to get to know yourself and explore the world of investment.

Discover your investor profile

To begin with, it is important to know your investor profile. In fact, this is a legal requirement of the CVM (Brazilian Securities and Exchange Commission). In general, there are 4 types of profiles:

1. Startup Profile: It is a person who has low risk tolerance, needs high liquidity (the possibility of withdrawing money instantly without loss), has little knowledge about the subject, and whose main purpose is to protect his savings.

2. Conservative profile: It is an institution that has a low risk tolerance, needs medium level liquidity, has some knowledge on this subject and at the same time aims to protect its savings.

3. Audited Profile: has medium risk tolerance, does not need much liquidity, is knowledgeable and expects better returns.

3. Experienced Profile: Manages risk well, needs low liquidity, has moderate or very much knowledge on the subject, and expects better returns.

Considering that the investment amount will be only R$ 1, the biggest advantage of this investment is experience. Experiencing market changes of little value will show you what your risk profile is. By being aware of this profile and knowing how to manage yourself, it is much easier to multiply the initial value.

Understand your strategy

Another important point to consider is strategy – namely the relationship between investment time and expected return. You may have heard the phrase day trading, but do you know what it really is? It is one of the possible investment strategies.

Here are some of the investment strategies:

Buy and wait: “Buy and keep” in Portuguese. When one expects to profit in the long run, the chances of higher returns are higher, as both the chosen investment option will have more time to appreciate and may receive interest payments, bonuses and dividends. In this strategy, the fundamentals of the investment option, i.e. if well structured, carry more weight with consistent and efficient management.

Day trading: In this strategy, the investor aims to profit from price changes in a single day of the investment option in question. In other words, it is a more speculative strategy and less concerned with the fundamentals of that investment.

swing trade: one of the most famous types of investments is characterized by the purchase, which is made and closed after a few days. In this case, the investor seeks profit in the short and medium term.

With these concepts you can already join that conversation: “I trade on the stock market, I trade day trading”.

The importance of knowing yourself

Self-knowledge is a process, and starting this path by investing in a “symbolic” value can be the key to a future of financial freedom.