Although the market is full of uncertainties, certain tried-and true principles can boost your odds to long-term success.
Investors should first define their financial goals. For example saving for retirement, buying a house, or paying for the education of your children. This will assist them in determining what amount of money to invest in the market and what type of investments will be suitable for their particular situation.
Prioritizing the creation of an emergency fund or paying off loans with high interest before investing heavily on the market is an excellent idea. If you do have money to put into the market, start small and gradually increase your investment as you gain more experience.
One of the biggest mistakes newbies make is trying to predict the market, Keady says. Keady says no one knows when the right time to invest.
If you’re just beginning it is best to focus on stocks of companies that you are familiar with. Peter Lynch, the legendary Fidelity Magellan Fund manager, once stated that you have higher chances of success investing in companies that have a proven track record and a strong growth prospect.
It’s recommended to stay away from online forums and ads touting certain-thing stocks. They are usually part of an alleged pump and dump scheme which involves the purchase of buckets of shares of a poorly traded company to push the price up, and then dump their shares for their own profit.
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