Stock Market Tips For Beginners

While the market is full of uncertainty, certain tried-and-true concepts can increase your chances for long-term success.

Investors should first identify their financial goals. For instance, saving for retirement, buying a home, or funding the education of your children. This will help them decide on how much money to invest and what kind of investments will be best suited to their particular situation.

It’s also recommended to put a priority on creating an emergency fund and paying off debts with high interest prior to investing heavily in the market. Start small and increase the amount you invest as you learn.

Keady says that one of the most common mistakes made by novices is to try to time the market. Keady claims that no one can tell when is the best time to invest.

If you’re just beginning investing, you should be focusing on stocks of companies that you know. As the famous Fidelity Magellan fund manager Peter Lynch famously said that you have a higher chances of winning by betting on companies with a solid track record and solid growth prospects, rather than trying to predict the future.

Avoid online forums and ads that promote stocks with a high probability of success. In many cases, these are part of a scam called a « pump-and-dump » where unscrupulous people buy shares in a tiny company to boost prices, then dump their shares to fill their pockets.

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