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Want to invest but have no idea what you’re doing? Here are some basic guidelines.
A study shows that just over half of all Americans invest in stocks. Investing in the stock market can seem daunting, but with a bit of knowledge and a smart strategy, it’s a great way to make money and build long-term wealth. After all, there’s a reason why so many financial advisors invest in stocks.
That being said, if you’re investing in stocks and have no idea what you’re doing or want to get started, you should follow a few ground rules to maximize your investment dollars.
1. Do Your Research
Before you buy any stock, make sure you understand the company in which you’re investing. Look at financial statements, read news articles and analyst reports, and get a sense of their overall performance and growth potential.
Many people buy stocks blindly without doing research because they’re attracted to the brand name or because they hear about it from people around them. If you are looking for a platform to start investing, Stash is a great place to start. They have tools to guide you to start building long-term wealth.
2. Diversify Your Portfolio
It’s important to spread your investments across different types of stocks and industries. This will help minimize your risk if one particular stock or sector takes a hit. For example, if you invest only in auto companies and a vital part that makes cars run can’t be manufactured, you will lose a lot of money in those investments.
Look into stock funds as well as individual stocks to ensure you have the best chance of investing in a variety of ways.
Hot Tip: Investing in stocks and feel lost? Stash has tons of resources and is a great place to start learning about stocks, ETFs and more.
3. Keep an Eye on the Market
Stay up-to-date on economic news and market trends, and be prepared to adjust your portfolio as necessary.
Things change in the world and it can affect your portfolio. Knowing when to move your investments and sell is a vital part of wealth management.
4. HOLD
Before you start investing, decide on a strategy and set specific goals for your investments. This will help you stay focused and avoid impulsively buying and selling. Many beginner investors fall into this trap, constantly checking their profits/losses and making impulse investments in risky stocks.
Time in the market beats timing the market. If you’re constantly buying and selling for minimal profits, you will likely not see an increase in wealth compared to holding.
Bottom Line
Investing in the stock market can be a great way to make money, but it’s important to approach it with a level head and a solid plan. Remember to do your research, diversify your portfolio, keep an eye on the market, and have patience. With these tips, you’ll be on your way to making money in the stock market in no time.
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Nothing in this material should be construed as an offer, recommendation, or solicitation to buy or sell any security. All investments are subject to risk and may lose value.
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