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Posted by on Apr 6, 2015 in Tips |

Essential Stock Market Tips For Beginners

Essential Stock Market Tips For Beginners

One of the most common questions we get here at Penny Saver Blog is ‘how do I start investing?’ It seems that most people have an interest in stock markets, shares and investment. But, not many know where to start. That’s where we come in! In this post, we’ll give you six fantastic tips for you stock market novices.

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Research and read as much as possible

The stock market is no walk in the park. It requires a strong understanding of its mechanics, shares and market prices. Not only that, but it requires a fundamental understanding of business and accountancy. We suggest building a solid foundation in these areas first. Understand why businesses work and why they fail. Get a feeling for why the stock market moves up and down and what affects share prices. Learn the market inside out before you dabble.

Get good investment software

The hardest part about investment is tracking your shares and watching others. We don’t all have time to be constantly following the market through news and papers. In fact, we strongly suggest you ignore these outlets. They often tend to spin reports and make something from nothing. Instead, get a good investment software and track your investments. Don’t worry too much about all the noise around you.

Use a demo account first

Before you invest your real, hard earned money, try a demo account. Many online brokers will let you practice gold trading or buy shares with a demo account. This means there’s no risk whatsoever. You can gain experience and understanding without compromising your own money. Invest as you would normally and watch how it performs. Learn to understand why your stock dipped or rose. When the time is right, apply that knowledge to the real world.

Only invest money you don’t need

Don’t fall into the dangerous trap over using your life savings to invest. Although investing is generally a strong reliable way of making money, there are no guarantees. Especially when it comes to beginners on the market. Start with small amounts of surplus money so you get a feel for the market. Only when you feel more confident should you begin putting more into the market. Think positively about your finances and be sensible.

Plan for the long haul

Investing is not a short term game. Although films like The Wolf Of Wall Street make it look like a quick way to get rich, it’s not! Investing is a really great way to get rich slowly. It’s a way to build your retirement fund or pay for your children’s college fees. Play the long game and you’ll ride out any dips in the market. You’ll make money because the market will always move forwards eventually.

Never invest in something you don’t understand

Finally, you must always invest in companies you understand. Your money relies on that company performing well. That means understanding their finances and their future trajectory. Do they have a good management team in place? Do they have good research and development? Are they planning for the future? These are the companies you want to invest in.

The stock market isn’t the big bad world it’s often made out to be. However, as a beginner, take it slowly and play it sensibly. Follow these tips and you’ll be well on your way to riches!

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