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STOCK INVESTMENT INFO
Say you are interested in becoming an investor in the stock market and you don’t have much experience in the field yet. As a new stock investor, you may be tempted to go after aggressive growth, or you may be tempted to sit back very cautiously and let things play out.
Either way, no one wants to lose money (especially playing the stock market), so here are a few suggestions about how to try stock investing without losing your shirt.
DO YOUR RESEARCH
If you are indeed completely brand new to the stock market, do some research before you jump in with both feet. Read a few basic articles and books about how to invest, join an investment group for advice and support and look around online for all the info that’s available.
Learn the difference between a stock, a bond, a mutual fund, an ETF, an investment allocation and more. Get a good basic understanding of as much as you can, and remember Warren Buffet’s famous rule (paraphrased): if you can’t understand it, why would you invest in it?
DIVERSIFY YOUR PORTFOLIO
One of the best ways to earn high returns is to keep your costs low. Small percentage charges and maintenance fees on your 401(k) will add up over time until your investment is much less than you expected.
ETFs and index funds, on the other hand, limit your risk while still keeping your cost low. These investments allow you as a stock investor to have access to more than 8,000 individual positions, which means you are not as much at risk of one company losing favor in the market or going bankrupt.
When they set out to beat the market, stock investors almost invariably lose their shirt – or if not, they still under-perform the market because they buy and sell at less than the best times. Almost no one can make it through the ups and downs of the market with a better performance than an EFT.
Don’t jump into the market with your entire life saving that you cannot afford to lose. Start small and work your way up. At the beginning, only invest what you can afford to lose.
Follow these quick tips for success in the market!