Basic Investing Tips- For You
Investing is a great way to grow your wealth and secure your financial future. However, if you’re new to investing, it can be intimidating and overwhelming to know where to start. That’s why it’s important to have some basic investing tips in mind before diving in.
Patience
To select the right stocks and reap the rewards of selecting them you need to be patient. Firstly you need to research the stocks patiently and take the most important success factors into account. Has the company’s stock been successful for at least five years? Do investors and the general public have a favorable opinion of the company? Their perception is crucial to the stock price and therefore it must be monitored carefully. Read news articles about the company and listen to experts’ analyses of the company. The most important success factor is if the stock price fluctuates often.
Patience does not only apply to researching the stock obviously! After purchasing shares in the company you believe is going to succeed it is important to know that that success may take a long time. Therefore you need to continue to believe in your selection regardless of the outside world’s opinion regarding the stock.
Separating the Stock from the Company
The stock and the company are two different things. Why does the stock price not align with the company’s actions sometimes? This is because stock share prices are based upon predictions, revenue, announcements, etc. When a company’s earnings report for Q1 is released, for example, it was predicted that the company would earn 1.7 billion dollars in revenue, but the company just fell short by earning 1.68 billion dollars. This in turn will cause the price to drop, because investors expected the company to do better and are now worried about the company’s future. The same goes for announcements if Ford announces it bought the Bugatti division of Volkswagen as a hypothetical the share price of Ford would go through the rough. However, if Ford announces that it has decided to let some workers go the share price will fall. It is all about how the company looks to the outside world, its earnings, and its predictions.
This is exactly why I don’t conflict with the two and it has brought me massive success. So many investors make this mistake and it is costing them money. Fortunately for you mistakes never happen twice if you identify them.
Always Selling at a Certain Percentage of Profit
From now on always decide what percentage of profit you want to sell the stock at and stick to that rule. Before I implemented this rule I lost very much money from getting greedy and believing that the stock would go up higher and it plummeted. Make your money grow and not disappear. Don’t get upset with yourself if the stock goes up more after you sell. Remember at least you made money. Some people panicked and sold their stock as soon as the Bear Market hit or there was a red day.
Conclusion
Now you have learned some of the Basic Fundamentals of Making Money in the Stock Market. Most importantly you have understood how to apply these fundamentals when purchasing stocks.
