Investing Tips for Beginners

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One of the best ways to prepare for what future holds is to save money and also start investing wisely.  Here are few investing tips that should help any beginner get better results. If you are also am investor, please share your own tips and I’ll update the article.

Investing tips for beginners

Don’t wait anymore

Are you interested in investing? Start NOW! Even if you cannot invest too much (most of us don’t sit on piles of money to invest), starting as early as possible will help you reap better results that someone who’s started later. Of course, if you’re in your 40’s it doesn’t mean you shouldn’t invest, just because you didn’t start younger. If investing is something you’d like to do, get ready to enter the ‘market‘.

Get educated as much as possible

Let’s say that the internet is providing us with countless resources of information, not to mention all the books about investing, podcasts etc. Try to learn as much as you can, since it’s your money you’ll be investing. If you have people who are already in the business, don’t be afraid to ask questions. The more you know about investing, the better prepared you’ll be.

Diversify

The trust about investing is that you’ll have success and failures. The worst thing that can happen is to get all your money on a stock and that to go down. That means good bye your heard earned money. This is why the old ‘don’t keep all your eggs in one basket’ adage is so true – make sure you have more options open and this will help you avoid a disaster.

Act as if you owned the company

Something we all tend to forget is that we’re not only trading ‘numbers’. We’re trading our money and buying shares in a company, so we owe a bit of it. Study the financial statements and try to better understand the business you’re investing it. Again, the more educated you are, the better.

Think long term

There are people who trade like crazy and some who are investing slowly. It’s possible to get fast results with investments, but the better option is to think long-term and prepare for the future. Active trading can work well for you, it’s just that you need to learn more and also get some experience. Ideally, investing should be something for your future, since most of us are doing this to secure our retirement for instance.

Don’t expect to make a killing

Many people think about investing and doubling their money in a year’s time. Unless you are extremely lucky, this is unlikely to happen. You do need to expect lower returns (specialists average them at 10%-12%). This means that once again you need to get ready to do this for a long time and think about the future, not only about tomorrow.

Don’t go only for the big companies’ stocks

Many beginner investors are just targeting big companies, which are familiar to them and ignore a lot of smaller unknown companies, which can actually give better results in the future. Keep an open mind about it and don’t just choose the biggest companies, try to see if there are any ‘newcomers’ that get your attention.

Buy low, sell high

Just as with Forex trading, it’s always a good idea to ‘follow’ trends. If a stock is high, it’s a good idea to sell, if it’s low, then you can buy.


Steve Adcock from ThinkSaveRetire.com

One thing that I believe keeps people from investing is the assumption that it’s complex, or that you need some in-depth knowledge of stocks and bonds, yields, profits, industry trends, whatever. But in reality, you don’t. At the very least, setup a targeted retirement fund through a reputable financial company like Vanguard or Fidelity and they effectively manage your fund distribution for you.

One needs ZERO knowledge about investing to actually invest. Like you said, the key is not to wait. Start today with as much as you can reasonably invest with, then add to it every month. Before long, a respectable nest egg will be at your disposal.


Your turn now! Let’s hear from our readers: what investing tips would you give? What has worked for you?

11 COMMENTS

  1. One thing that I believe keeps people from investing is the assumption that it’s complex, or that you need some in-depth knowledge of stocks and bonds, yields, profits, industry trends, whatever. But in reality, you don’t. At the very least, setup a targeted retirement fund through a reputable financial company like Vanguard or Fidelity and they effectively manage your fund distribution for you.

    One needs ZERO knowledge about investing to actually invest. Like you said, the key is not to wait. Start today with as much as you can reasonably invest with, then add to it every month. Before long, a respectable nest egg will be at your disposal.
    Steve Adcock recently posted…Using Etsy to generate passive incomeMy Profile

  2. Heya,

    Great tips. If people listened to Warren Buffet a bit more, there’d probably be a lot more investors out there – just buy a cheap index fund already! Just getting over yourself and doing it is such a hurdle sometimes though. I think many people are just scared of the stockmarket. They think about the great crash of the 20’s and of course, the recent ‘financial crisis’ of 6 years ago. Education is obviously crucial and it’s free on the net, so there’s not much excuse anymore.

    Cheers
    M recently posted…Are Stocks Cheap Right Now?My Profile

  3. The best thing I like about you is that you use simple words, and I apreciate you passion, but anyway you can correct me cuz I am beginner , and also from RO, just struggle to type some words:P

    • Hello, Nicolae and thanks for dropping by. I am happy you like my style. It’s important not to use too many ‘fancy’ words since most of our readers (as well as myself) are not financial planners or consultants and the message needs to get across. Not to mention the visitors, just as you and me, come from all parts of the world 🙂
      dojo recently posted…WordPress Design: Cleaning Service BusinessMy Profile

  4. Cost averaging is another strategy that can work for long time investors. Say you pick a blue chip company’s stock and you decide to stick with them for the long haul. What you can do is to buy in batches.

    To start off, you need to have a budget that you use to buy, 100 shares of company A every month (or quarterly, annually; it really depends on you). Once you have that, all you need to do is to buy shares of company A every month.

    With this strategy, you don’t have to time the market. The great news here is that when prices are low you can buy more shares. Thus your overall average price share is lower.

  5. Ramona, you are correct! The online world is filled with information nowadays, it’s practically impossible to find an excuse not start investing ASAP!
    It’s true that many have lost money by investing in the wrong stock or for who knows what other reasons, and I think this is why many are afraid to invest in the first place. As long as you start small though, and don’t go investing all your life savings at once, you should be able to see your money multiply in no time 🙂

  6. What exactly do you guys mean by zero knowledge? Investing for the first time in stock (or mutual funds, bonds ecc. ) is quite confusing for someone who has never done it before (like, in my case), the financial markets are definitely a total mystery to me!

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