Even though the stock market is an area of uncertainty there are tried and tested strategies that can increase your chances of achieving long-term success.
Investors should first determine their financial goals. For example, saving for retirement, purchasing a house, or paying for the education of your children. This will help them decide what amount of money to invest in the market and what kinds of investments would be appropriate for their situation.
Prioritizing the creation of an emergency fund or paying off loans with high interest prior to putting your money into the market is also an excellent option. Start small and increase your investments over time as you gain experience.
Keady clarifies that one the biggest mistakes beginners make is to attempt to time the market. “Nobody knows the exact time to invest,” she adds, noting that the best way to invest is to make an investment for the long run and stick to it through rough patches.
If you’re just starting out, it’s a good idea to concentrate on stocks from firms that you are familiar with. Peter Lynch, the legendary Fidelity Magellan Fund manager, once said that you sell security papers via the market have a greater chance of success by investing in companies with a proven track record and growth potential.
Avoid online forums and advertisements that promote stocks with a high chance of success. In a lot of cases, they are part of a scheme known as a pump and dump where unscrupulous people buy shares of a sluggishly traded company to increase the price and then dump their shares to make money.