Stock Market Tips For Beginners
While the market is full of uncertainty, certain tried-and-true principles can help boost your chances for long-term success.
The first thing any investor should identify their financial goals. This could include saving for retirement, purchasing a home, or funding your children’s education. That will help them determine the amount to invest in the market and what kinds of investments will be suitable for their specific situation.
It’s also an excellent idea to focus on building an emergency fund and paying off debts with high interest before investing heavily in the market. Start small and increase your investments as you become more experienced.
One of the biggest mistakes newbies make is to try to time the market, Keady says. Keady believes that no one knows what the ideal time to invest.
If you’re just beginning it’s best to concentrate on stocks of companies that you understand. As the famous Fidelity Magellan fund manager Peter Lynch famously said that you stand a better chance of winning by betting on companies that have a strong track record and solid growth prospects rather than trying to predict the future.
Avoid online forums and advertisements that promote stocks that have a high chance of success. In many cases, they are part of a scam called a “pump-and-dump” where shady investors purchase shares in a thinly traded company to increase prices, then dump their shares to fund their own pockets.
