Although the stock market is filled with uncertainty, certain tried-and-true principles can help boost your chances for long-term success.
Investors should first define their financial goals. For example, saving for retirement, purchasing an apartment, or financing the education of your children. This will help them decide on how much money to put in and which type of investment is best for their needs.
It’s also recommended to prioritize creating an emergency fund and paying off high-interest debt prior to investing heavily in the market. If you have the funds to put into the market, start with a small amount and gradually increase your investment as you gain experience.
Keady says that one of the biggest mistakes beginners make is to try to time the market. “Nobody is able to pinpoint the ideal moment to make a move,” she adds, noting that the best strategy is to make an investment for the long run and stick with it, even through the rough patches.
If you’re just beginning your journey, it’s a good idea to concentrate on stocks of firms that you are familiar with. Peter Lynch, the legendary Fidelity Magellan Fund manager, once official website said that you stand a better odds of success when you invest in companies with a demonstrated track record and a strong growth prospect.
Avoid forums and advertisements that promote stocks with a high probability of success. In a lot of cases, they are part of a scheme known as a pump and dump where shady investors purchase shares in a tiny firm to boost the price and then dump their shares to line their pockets.