4 Investing Tips for Beginners
If you’re new to investing there are a lot of things that you need to learn in order to safely start investing your hard-earned money and using it to make more. That being said, the 4 Tips below should get you started. Enjoy.
The first is simply to use the acronym KISS. No, we’re not talking about the rock band but the old adage Keep It Simple, Stupid. What this means is basically that you shouldn’t try to do everything at once or jump into the deep end of the pool. Many people who are new to the investing world tend to trade too often, try to predict the unpredictable or focus on data that’s irrelevant. By keeping things simple, like focusing on a required margin of safety when buying and investing for the long-term, your odds of success will increase exponentially.
The second is to go into investing with the proper expectations. The fact is, unless you’re an extremely lucky person, you’re not going to double your invested money in the next year using stocks. You certainly could take on a much larger amount of risk, buy extensively on margin or take a flyer on a chancy security but, if you do that, you’re not investing anymore you’re actually speculating. Having the proper expectations will help you to invest wisely and keep your risk at a minimum.
Tip number 3 is simply to prepare yourself to hold on to your stocks for a long time. The fact is that stocks can be very volatile and go up and down according to knee-jerk reactions in the market. As anyone with a little bit of experience could no doubt tell you, it’s absolutely maddening to try and predict the market in the short term. Many new investors still try to do this however and can quickly grow frustrated. As a new investor your best bet is to be patient, focused and diligent, knowing that the market will, in the long run, usually produce good results.
Finally there’s Tip number 4 which is to tune out the market noise. Frankly there are dozens of media outlets that will be competing for your attention, most of whom will be focusing on daily price movements of the various markets as well as making guesses as to why their prices went up or down. The fact is that these changes, for the most part, don’t represent any real value change but instead the volatility which is inherent in the open market. The investor who’s able to tune out this noise will be able to focus on what’s really important, the performance of the companies whose stock they own.
The fact is that, much like you won’t be able to become a better football player by simply staring at stat sheets, your skills as an investor won’t improve by looking at charts or stock prices. The way to improve is to get to know the company or companies that you have invested in, have patience, keep your risk low and focus on what’s most important, the long-term growth of your assets.
Filed under: Investing
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