If you have no experience investing in stocks it can appear overwhelming. However, the truth is that buying stocks isn’t difficult at all, it’s selecting which companies to invest in that is the key challenge. How do you pick the companies that are going to beat the stock market and make you the most money? Here are 5 tips to help you on your way.
1. Emotions have no place on the trading floor
Successful investors have complete control over their emotions. If you make an investment decision based on emotion there’s a high probability it will fail. Research and planning are the key to good investing decisions. Emotions have their place in life, however the stock market is not the place for them.
2. Think beyond the ticket symbols
It’s important to remember that when you buy shares you become a part owner of that company. This is important to remember so that choosing your stocks is more than just an abstract concept. Have an understanding of the business’s objectives, financial statements and prospects. This will help you determine whether you want to invest in them or not. Platforms such as 10CFDs have industry experts on hand to help you answer any questions you have around certain stocks.
3. Fail to plan and you plan to fail
Investors sometimes get trigger-happy when prices are dropping or rising sharply. This links back to point 1 where emotions can get the better of investors who sell or buy too early. By planning your trading strategy out you’ll have a better understanding of:
why you buy certain stocks; and
under what circumstances you would sell them
4. Build your portfolio over time:
Timing the market can be difficult, so what the more successful traders do is use ‘time’ to their advantage. Some of the most successful investors that ever lived were happy to accept that they may not be rewarded on their stock purchases for years and even decades. Use time to your advantage and look to leverage any of these three strategies:
– dollar-cost average
– buying in thirds
– buy “the basket”
You can learn more about different trading strategies through the 10CFDs education centre.
5. Don’t trade unnecessarily
New investors often think they need to trade by the day or week to make money. Getting into this habit is a sure way to make bad decisions. The more you check the stock market the more likely you are to make a rash decision. Avoid listening to short-term noise and focus on what’s relevant to the long-term performance of your stocks.
These five tips should set you up for a successful investing journey. When you’re ready, head on over to 10CFDs and sign up today to unlock the financial trading world.