10 Tips to new Stock Investors

Investing in the stock market is always exciting, whether you are investing for income, preserving your wealth or to build wealth. It has consistently been one of the best ways to make your money grow. On average, the S&P 500 grows about 8% a year- While that may not seem like much, the average savings account in the United States pays just 0.06%. But with the potential for growth comes the risk- The stock market could crash at any time and you could lose more than you make.
That's why it's important for all investors to consider the risk before investing.

1. Invest in yourself

When I first got into investing in the stock market I thought I was going to be able to just buy low and sell high with ease. Try to ride trends and read charts- that was not the case. After a few hundred dollars lost I decided this strategy was not working. So I invested in myself, I read book after book, watched Youtube videos, listened to famous investors such as Warren Buffet and tried to soak in as much information as I could. Once I started doing this, I could see my investment strategy changing and along with that so did the results. But I never stopped. I continue to try to learn something new every day.

2. Only invest what you can lose
It's important to know that the market goes up and down, sometimes it enters what is called a bear market. A bear market is when the market is down 20%. This does not happen often- but definitely happens from time to time. The likelihood of you losing your entire portfolio value is slim to none, but for it to lose value on your investment is likely if you don't do your due diligence.

3. Trust in yourself

When I first started investing I was just buying everything "successful" stock traders told me too. This could be anyone from Jim Cramer to a popular Youtube personality. Most of the time the trade lost me money. When you do your due diligence and stick to your strategy, you will prosper. It might take a lot of trial and error but you WILL find a strategy that works for you.

4. Only invest in companies you understand
It's easy to say " I like iPhone, I'm going to buy shares of Apple " But do you understand the overhead cost to manufacture an iPhone? Do you know what the company is invested in? Do they rely on imported goods? are they subject to tariff changes? Do they have other sources of incomes? How do they compete in the market against their competitors?

5. Find what broker is best for you
There are tons of brokers that want to earn your business. The broker acts as a middleman when your buying or selling shares of a company. Most charge a fee to execute the trade.

So it's important to see who fits your needs better. If you plan on making a ton of trades, a lower trade fee would make sense. If you only make a few trades a year and would value better research tools, a broker that offers that would make sense.

Some of the most popular brokers are Robinhood, Fidelity Investments, TD Ameritrade and Merrill Lynch.

6. Don't panic sell 
My biggest problem to this day is panic selling. Anytime there is a significant drop in the market people (Including myself) like to sell because a specific investment does not look as good now that it's in the red. But if you believed in a company one day when it was up 4%, you should believe in it when it's down 2% a week later. If the company fundamentals did not change, neither should your investment.

7. Don't overlook ETF'S

Exchange traded funds are a great easy way to diversify your investments. You invest in multiple companies in one trade and are stretched across multiple industries. They usually have a good return rate and take away the risk factor of one company crashing.

8. Hold some cash
It's important to have some cash on hand and ready to invest. You always want to buy when a company stock is low.. and nothing sucks more than not having buying power to buy into a really nice position.

9. Avoid day trading, swing trading, and margin trading
Day trading is speculation, you invest in a company in hopes that the stock goes up in a one day spam. You can certainly make money in the short term- but this is an unproven method of gaining long-term gains.

Swing trading is similar, instead of investing in companies in a day that plan to be in and out within a week or so. Again, it's possible but there has been no evidence of this being a legit way to make large returns.

To quote the great Warren Buffet, "it's stupid to borrow money to invest".

10. Don't be lazy
If you are going to invest thousands, if not tens or hundreds of thousands in a company- you better know every nook and cranny of the company. Email the company, ask questions about operations. Look at all financial statements- listen to earnings calls. Ask for second opinions (take it with a grain of salt).



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