Stock Market Tips for New Investors

Hey y’all! This is a contributed post by Brianna Hall. She is a freelance blogger who has been exploring ways on how she can reach financial freedom soon. Being a Millennials, she has high hopes that she can change the way her generation thinks about investment. Brianna is now working on her investment portfolio through the stock market.

When it comes to investing, stocks are well known for being a viable investment opportunity. They are the easiest and most profitable way to grow your wealth over time. However, the whole of process of buying stocks and watching the market can be quite technical when it comes to the analytical data you need to monitor. It can also be very daunting for new investors who have little to no experience on the stock market. But, just like any other investment opportunity, learning about investing in stocks can be done by researching online and reading books written by professionals.

Many successful investors have learned their skills the hard way though – through trial and error.

In this post, we will highlight some tips that will help new investors in the stock market to successfully fulfill their investment goals.

Aim for long-term investment goals

To be able to get the best results from investing, one needs to set out long-term goals. Most Millennials, carrying large debt and facing stagnant wages, have short term results on their mind. They veer away from investing long term, or tap into retirement accounts more readily than Boomers. A long-term goal would be retirement funds, future college expenses, or building your first house.

The initial step is to know your purpose and the timeframe of how long you want to attain these goals. If you need a return on investment within a few years, then the stock market isn’t the right option for you. The market can be very volatile, and provides no certainty that you will get a return on your capital within a short time.

Know how to purchase stocks

How do you buy quality stocks? This is one of the questions newbies will commonly ask when considering the stock market. It’s actually quite easy. A market insight page suggests that there are several ways of purchasing stocks, and these can be seen below:

  1. ‘Direct Stock Purchase Plan’ is a program offered by companies to allow them to sell shares of stocks directly to investors.
  2. ‘Contracts of Difference’ is a process where one can buy stocks without having to own individual shares.
  3. ‘Transacting with Brokerage firm’ is another way to purchase stocks, but it’s ideal to look for companies with full-service that executes investing, trading, and offer additional services (advising, planning, and tax assistance).

Take note that the process of buying stocks must suit your financial goals and situation, so spend time in researching the best option for you.

Understand your investment personality

Before jumping into investing, it’s advisable to know your investment personality so that you’re able to find the best strategies that suit your risk tolerance, and emotions among other things. Avoid any investment that will make you anxious, as it will stimulate fear that ruins the whole investment process. Also, it’s important to know your tolerance for loss. As an investor, one needs to understand that investments often include risks, and at some point you’ll have to incur losses to gain experience and positive results in the future. Calculated risks are necessary in investing because its gives investors an idea of how much they are willing to risk as well as earn from a particular asset. 

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4 Replies to “Stock Market Tips for New Investors”

  1. I started investing with Vanguard last June (2015) and with ups and downs on a market I am up 4.4 % anyway due to dividents. The only thing I regret is that I had not started investing sooner. I am trying to catch up now! There is no such a thing as starting too small.

    1. I’m so glad you started! Anything you can put into it counts. Re-investing the dividends is a smart way to go too.

  2. The great thing about starting with small amounts is that it allows you to adjust your mindset to volatility. I’m also an auto-reinvestor. I don’t want to see that money for many years.

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