5 Stock Market Tips for Beginners
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It is never too early, or too late to start investing in stocks. By embracing a few easy concepts, you can feel pretty confident about investing. Here are 5 Stock Market Tips for Beginners.
1. Keep it simple: check your emotions at the door.
by focusing on the long term - and not getting caught up in the daily stock price, bc that can lead to irrational decisions.
2. Pick companies, not Ticker Symbols
a. Invest in companies with strong balance sheets, cash on hand, and low debt,
b. Look at companies you understand and enjoy.Like tech? Apple, Amazon, Netflix. Like cars? GM, Ford.
c. Remember, you're buying a business, not just a stock ticker symbol.
3. Create a Stock Check List to reduce anxiety:
Make a list of pros and cons of why you're buying a stock, and when to sell it.
Once you've set the criteria for a stock you've invested in - stick to the plan.
4. Build up stock positions gradually.
a. Have $10k total to invest? Buy stocks $1-2k at a time.
Dollar Cost Averaging is one popular way to do this: At set time intervals 1x a month / quarter, buy into a stock, so you know you're not buying at the peak.
5. Avoid Over-trading: you're not a day trader sobuy a stock, and let it simmer. You've done your research, so just review it every so often to make sure it stays in line with your Check List.
a. Always focus on your returns only, don't worry about others
b. Aim to beat at least 7% returns, as that is what the S&P 500 returns every year, on a historical basis.