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9 Steps to Start Investing in the Stock Market

It has never been easier to start investing in the stock market. With a mouse click, everyone can buy and sell shares. More and more people are taking their own finances into their own hands – and we think that’s a good thing.

The era we trust our investment money to bankers is over. They have had their chance. Now it’s up to you and me. Today, we’re going to explain to you how to get started.

Remember, it’s not because investing is easy, that it’s made simple. Anyone can make money when the markets are rising, but few people can keep their profits or limit their losses when markets fall.

Most investors need to start all over again after the next bear market. A bear market they don’t take any profits from.

The stock exchange is full of pitfalls. Avoiding these pitfalls is essential for an investor who wants to build a capital. There are 9 important tips you should not forget when you start investing in the stock market.

When you learn what to do and what not to do, there’s nothing that can stop you from earning a decent amount of money in the stock market.

start investing in the stock market

1. Determine the right investing objectives

Much depends, of course, on your investing goal(s). To invest successfully, you must start with a long-term plan. This means you can’t just go out and buy shares. When you buy shares that don’t suit you as an investor, it can go terribly wrong.

You will probably never invest again and you will miss out on more future returns. You need to know which stocks suit you depending on your goals and risk level.

2. Do not get caught by the feeling of being an ‘expert’

A stock can also perform particularly well. However, this creates a false sense of certainty, which means there is a good chance that you will lose more in the future than that one good experience.

When you feel that you are an expert after one good investment, you will often experience the true fact of succeeding afterwards; you’re not an expert and you can and will also lose money.

3. Diversify your investments

For example, if you make big profits with crypto coins or marijuana shares, it is best to invest (a part of) their profits in an other sector. You need to diversify your profits to lower the risk of your portfolio.

No one ever has become poor with profit taking and spreading the risk. Don’t think all the big winners will keep on winning.

4. Think of the trading costs

A low-cost investment fund or a low-cost ETF are good alternatives for those who are not actively engaged in their investment portfolio. If you have a good base, you can start buying individual shares. But start carefully. Work with limits and only invest with money you can miss.

5. Read and learn about investing

Only when the tide goes out you discover who’s been swimming naked. – Warren Buffett.

Don’t be the guy who doesn’t understand why stocks can fall. Read a lot about the investments you make. Only by reading, you gather knowledge, you know what is going on and you know how to react.

6. Do not go on an adventure

The novice investor takes the advice of the legendary investor Peter Lynch to heart:

Invest in companies that you know. If you do not know how the company earns its money, you should not buy any shares.

Good companies for investors have the right combination between quality and price. So you need to know the value of a company. Only an investor who knows the true value can see if Mr. Market under- or overvalues the stock.

7. Think long term investing

Volatility can seem frightening. A lower price does not automatically mean a lower valuation. In the long term, the value always rises, but in the short term the price can deviate considerably from this.

Successful investors always keep a long-term horizon in mind.

8. Buy stocks gradually

Many investors often make the mistake of going ‘all-in’ at once. It is much better to step into pieces in a market. When the price rises in the meantime, you make a profit. When the price drops, you can buy more pieces.

9. Better boring rich than popular poor

In the beginning, the novice investor often pours into popular, fast-growing companies because these companies get the most attention in the media. But several studies show that boring companies perform much better over a long period of time. These companies often pay out a dividend, in some cases even a growing dividend.

It is these dividends that can make a difference in the long term. In addition, a company can only pay its dividend or increase it year after year when it’s a very strong company with good results. Then the share price follows automatically. Boring is often better than popular at the stock exchange. For the novice investor it is better to focus on these companies while you learn the tricks of the trade.

Bonus Tip: Have fun learning how the stock market works and how you can quickly start performing trades on your own. Take advantage of the most powerful tools and videos on the internet to guide you step-by-step through the process.

This has been a guest post by Wall Street College an online investing site for courses and videos. Have fun learning how the stock market works and how you can quickly start performing trades on your own. Take advantage of the most powerful tools and videos we offer to guide you step-by-step through the process.

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