Stock investing for beginners
Think about this for a moment: How much time do you spend researching and following up on your investments? Most people will spend more time researching their next car to buy, their next pair of sneakers, the best suit, the best dress, the best pasta sauce, etc. but these same people rarely spend more than 15 minutes a month researching their own stocks. I know of a person that spends hours clipping coupons (saving cents to a few dollars) but just minutes investing thousands in stocks.
This is why the majority of people FAIL at investing, because they don’t know what they are doing, they don’t care to know where their money is and they don’t know who to hire to invest their money. If you are not interested in learning how to invest properly using your OWN system of trial and error over many years, I suggest that you invest in mutual funds or similar diversified vehicles. Over the long run (minimum 10 years), mutual funds and dollar cost averaging will give you favorable results with minimal worries. I will elaborate into methods that can be used to invest successfully in individuals stocks in following .
1.Ignore Stock Market News
You should ignore analysts on TV, the radio, the newspaper and all other TALKING HEADS when it comes to investing!
What stocks do they talk about? – The same old group, every day of every year – Why? Because they don’t know any better, they are sheep like the general public, repeating what every economic textbook says and every other economist tells them to say. Everyday, the same companies are highlighted on the evening news
Stocks are worthy to be held over long periods of time, this is a proven fact but don’t EVER hold a stock when it is flashing SELL signals left and right (especially if everyone on TV is telling you to buy now on the dip, “it is a bargain”). These talking heads were saying this about every stock on their computer screen in 2014 and 2015 – “buy the dip”. The only dip was the guy on TV and all of the suckers watching him/her. I don’t mean to offend anyone but you need to take control of your investing life, you need to learn why stocks go up, why they go down and that NO STOCK is immune to a bear market like the one we just had.
Leaders of the market now, won’t be leaders in the future – on some rare occasions, a stock here or there will defy everything and grow decade after decade, but even these stocks end their amazing rise at some point. Same is true for old leaders, they won’t lead the markets of today – they become too large and their growth slows, preventing them from being excellent growth stocks and giving you excellent returns. Now – I never said you couldn’t own a stock like this, many people are satisfied with these companies, they “feel secure”, that is fine; everyone has different goals.
Let the market tell you what is going up or down. Watch “sister stocks”, I talk about them in our education section of the website. What do I mean by sister stocks? They are stocks that are in the same industry. When an industry is strong, most of the stocks in this group will rise, hand in hand. (I say most – not all, laggards always stay behind). Fundamentals will be strong for most stocks in the group and technicals will guide you along the trip – think of technicals as a road map.
2.Build your own stock listing
3.Build your own stock trading system
The secret of my success required an earnest and conscientious effort on my part. This action accomplished something to the point of pure boldness; in other words, no matter how boring or non-important you think learning how to trade may be, it must be done to insure a success story.
Every successful company needs a business plan. Yet, when most people take a gamble on the securities industry, they fail to put a trading plan into place. In other words, they end up going on an emotional roller coaster, governed by how the market performs.