Stock Market Tips For Beginners
Even though the stock market can be unpredictably volatile, there are some tried-and-true strategies that can help you increase your chances of long-term success.
Investors should first determine their financial goals. For example, saving for retirement, purchasing a house, or funding the education of your children. This will help them determine how much money they should invest and which type of investment is best for their situation.
It's also a good idea to prioritize building an emergency fund and paying off high-interest debt before putting your money into the market. Start small and increase your investment as you gain experience.
One of the biggest mistakes novices make is trying to time the market, Keady says. "Nobody knows the exact right time to invest," she adds, noting that the best approach is to make an investment over the long term and stay with it, even through rough patches.
If you're only beginning, it's a good idea to concentrate on stocks of companies you know about. As the famous Fidelity Magellan fund manager Peter Lynch famously said, you have a better chance of winning if you bet on companies that have a strong history and strong growth prospects than by trying to predict the future.
Avoid forums and advertisements that promote stocks with a high chance of success. In a lot of cases, they are part of a pump-and-dump scam in which shady people purchase buckets of shares of a sluggishly traded company to increase the price and then dump their shares to fill their pockets.
