Stock Market Tips For Beginners

Although the stock market can be unpredictably volatile there are tried and tested strategies that will help you increase your chances of achieving long-term success.

Investors must first establish their financial goals. For example, saving for retirement, purchasing a home, or funding the education of your children. This will help them decide the amount to invest in the market and what type of investments make sense for their specific situation.

It’s also recommended to put a priority on the creation of an emergency fund and paying off high-interest debt before investing heavily in the market. If you do have money to invest in the market, begin with a small amount and gradually increase your investment as you gain more experience.

Keady states that one of the most common mistakes made by novices is to try and time the market. Keady says that nobody knows when is the best time to invest.

When you’re first starting out, you should focus on stocks of companies you are familiar with. As the legendary Fidelity Magellan fund manager Peter Lynch famously pointed out that you have a higher chance of winning if you bet on companies that have a solid history and strong growth prospects than attempting to predict the future.

Avoid forums and advertisements that promote stocks with a high probability of success. In a majority of cases, these are part of a pump-and-dump scheme in which shady people purchase buckets of shares in a tiny company to drive up the price, only to then sell their shares to fill their pockets.

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