Are you new to stock market investing? Fear not – investing is one of the best ways to build up your wealth and savings! It’s also never too late to get started.
Here are 7 secrets for success:
1. Don’t be in a hurry or impatient – this is especially true if you are getting started late. Even though there is an advantage to starting your investments while young, the truth is that anybody can begin seeing the effects of wealth building over 5 years or more. The secret is to remember that slow and steady wins the race. Let your wealth build up at its own pace. Trying to force things can result in loss though risky trades and excessive trading expenses.
2. Diversify your holdings – It is foolish to put all your money in one stock. If you do not have enough funds to put at least $2,000 in 5-10 stocks, then avoid individual stocks and stick with mutual funds. We have many more Stock Market Investing Secrets Articles Now Available.
3. Don’t be an “all or nothing” trader – After you decide on a certain allocation for a stock or fund, avoid putting the whole position on at once. Also avoid selling a whole position at one time. Work your way into and out of positions. You never know what a stock will do next. If you want to take profits or cut down on a loss, consider removing part of your position, but leave some shares in case the position goes up.
4. Avoid risky stocks – you want to avoid penny stocks and stocks that are not making any money. If someone tells you that a stock is going up, don’t buy into it unless you understand what the company does and what it’s advantage is. If you cannot determine this, then there is a good chance that the stock is going up on speculation.
5. Select solid growth and value stocks – Growth stocks are stocks that bring something new to the market and therefore have a legitimate reason to increase in value. Value stocks are stocks that are currently priced low to their income and/or assets. The best way to find these stocks consistently is to identify websites (e.g. Yahoo Finance) or magazines (e.g. Forbes) that have articles by respected analysts who explain the reasons behind their selections.
6. Consider using a re-balancing system – A good re-balancing system will use a formula to objectively pull money out of stocks when they are overvalued and put more money in when stocks are cheaper. Of course, no formula has perfect timing, but they are good enough to give you an edge over the long term.
7. Avoid short term trading and technical-analysis – Most people can not successfully predict markets over the short run, especially by looking at charts – nor is this necessary for successful trading and investing. We have many more Investing Help Articles Now Available.