Do you want to invest in the stock market because of the lure of significant earnings, but you’re jittery and fear the unknown? Well, the likes of Warren Buffet have made it, and so can you! But you’ll need first to learn the ropes. The sooner you start investing, the better. We know investing your first $100 may seem intimidating, but you will be glad you got started. Here are nine time-proven insightful tips on how to navigate the complex stock markets across the globe.
1. Learn the Basics About Stock Markets and Equity
If you’ve chosen to be a stock market investor and not a trader; you should know that you may have to hold on to the stocks you buy for longer than a trader. As such, you’ll need to make informed decisions. Before you can do that, you’ll need to learn about stocks, stock market trends, stockbrokers, and market timings.
2. Choose a Reputable Stockbroker
A stockbroker is a licensed stock market professional that takes and executes sell and buy orders placed by investors who buy or sell stocks. You should order here a reputable stock broker. You may also look for an Outsourced Trading Solutions company and discuss what your options are.
3. Don’t Invest in Businesses that You Don’t Know About
It is worth noting that an investment made in the stock market aims to get a stake in a business. As such, you’re not investing in a stock but a business. You should know what a company produces or deals with before investing. Such assessments will often show profitability and the chances of your stock growing in value. If you will like to assure a return in profits, check this article about investing safe havens.
4. Make Use of the Stop Loss Feature
The stop loss feature is an automated trading function or features embedded on most trading portals run by stockbrokers. The feature helps you to reduce the chance of getting into deep losses. You can do so by selecting a price level at which your position can get squared automatically.
5. Widen Your Portfolio If You’re Investing Big to Reduce Investment Risk
It’s said that it isn’t wise to put all your eggs in one basket! If you’re investing big-time, you may lose lots of money if your preferred stock prices decline markedly. It is advisable to broaden your portfolio, and get some optimum gains and reduce your investment risk.
6. Invest Your Surplus Finances
Stock markets are volatile, and the risk level often rises when economic times are tough across the globe. So, don’t invest what you need or your backup money for emergencies. Only invest what you can afford to lose without compromising your financial standing.
7. Monitor Your Investments
Monitoring your stock helps you to know when to buy or sell. But if you don’t have enough time to monitor global politics and financial markets, get an experienced financial planner to monitor your portfolio. You can use online platforms that provide stock market information and analyses to monitor your portfolio.
8. Derivatives Are Not for Beginners, Avoid Them
Stock derivatives are long-term types of stock market investment vehicles. They have a fixed expiry time, and they are contract-based. The derivative market often consists of futures and options, and they’re as attractive as the margin facility because they allow you to buy big with little capital. But they aren’t ideal for beginners who are looking for a quick test of the market.
9. Try Equity Mutual Funds
The stock market is challenging, and it isn’t an ideal option for all people seeking to invest. First-timers who have failed before when trying to invest in the stock market should consider putting their money in equity mutual funds. These funds invest whatever amount you invest with them in the stock market, but you won’t get involved directly. You can learn from investors like Porter Stansberry, that have a long track record of beating the market.
If you’re seeking to be a successful investor like Andrew Defrancesco, then you’ll need more time to spare for such an activity. If you’re too busy, it will help if you hired a financial advisor to do the heavy work for you. Otherwise, try the equity mutual funds, where you’ll leave everything in the hands of the fund managers.