How To Start Investing in Stock Market

 

One of the biggest reasons beginner investors lose money when investing in stock market is  not having a system in place.How_to_start_investing_stock_market

 This is a big mistake to make especially if you want to build long-term wealth through investing in the stock market.

Why? Because the stock market is  one of the mountains of wealth  that you can make money investing.

 

In an article published by www.businessinsider.com  on  stock investing, the S&P 500 index  had a 27 percent gain in one year.

On the other hand, you have many investors who lose money investing in stocks.

The main reason they  lose money in stock investing is that the get emotional  about investing. They let the market control them instead of managing their risk.

As a result  many of those investing in the stock market-sabotage their own plans to get wealthy

 

If you are a novice investor in stock investing here’s the thing you must do:

You need to find a proven model for investing in the stock market and stick with it.

 

I learned a stock investing system that served me well over the years.

If I had to narrow investing in the stock market down to five steps, they would be…

 

  •         Define your investing objectives
  •         Find the stocks that meet your investing objective
  •         Have an exit strategy in place
  •        Cut your losses, let your winners run
  •        Keep  testing your investing system

 

Outline your investing goals

The absolute worst way to invest in the stock market is to pick stocks because you had a hot  stock tip. 

You would think that it makes sense- that anyone who is investing in the stock market -would do a thorough research before putting money invest.

The truth is many people I know do stock investing on a “hot tip” from  CNBC, their neighbor and relatives.

Investing in the stock market-on the whim of a stock tip-is one of the biggest reasons most investors lose money.

What you should do instead is to find out why you want to invest in the stock market

There are two ways you can invest in the stock market: 

You can buy and hold stock for the long term.

You can buy stocks and sell them for profit in the stock market

 

Both methods of investing in the stock market have worked for many investors.

The most important thing you must do is choose-the best method that will match your investing goals

 

Study and choose stocks that meet your investing goals

 

Once you are clear about-why-and-how-you are, going to invest in the markets you should spend some time to study the stock market.

When you are studying the market, you need  to screen for the stocks that meet your criteria.

There are many stock screening tools you can use. You can get these stock investing tools free or pay for them.

The secret to choosing stocks you’ll invest in is:  Have a knowledge of the industry or the  company you are choosing.

It’s very easy to know more about a company’s financial summary from financial websites 

Here’s some of the ones I use:

Finance.yahoo.com

www.fool.com

www.thestreet.com

www.bloomberg.com

www.morningstar.com  (this is for those investors who are interested in mutual funds)

www.zacks.com

www.gurufocus.com  ( this website is useful for finding out the investing strategy and stocks investing gurus are investing)

www.optionetics.com  (this website is useful if you want to learn options trading)

 www.businessweek.com

www.investorhome.com  is a portal for investors on the internet. You can find all the top investing education, news and stocks sites at this portal

 


Have an entry and exit strategy

 

Something every beginner investor needs to know about stock investing is this: successful investors have an entry and exit strategy in place before they invest a dime in the stock market

Why? Because in the secret to creating wealth in the stock market is having a clear game plan.

This means you have to be clear about how much money you are willing to invest in a stock. You also have to know upfront how much stock market losses you can tolerate.

The best way to protect the money you invest is: to have a price range you are willing to buy a stock.  This means you should never buy a stock at any price

The other thing you must do to protect your money when you buy a stock is to have a stop loss mechanism in place.

This means you should set a particular price for which you are going to sell a stock if the price starts falling.

 

 

Cut your stock market losses and let your winners run

 

The hallmark of successful investors is that they are willing to let go when they lose. They don’t hang on to a losing strategy.

Most successful investors will quickly sell a stock that is tanking so that they reduce their stock market losses

In the same manner,  successful investors also allow their winning stocks to keep on yielding profits

You should adopt the same mindset that successful investors have when you start investing in the stock market

 

Keep Investing

 

The secret to winning and building wealth in the stock market is to-stay in the game long enough- that you win.

This means you want to invest your money with low risk  at the same time earn good returns on your money.

After all that is  why you are in investing in the stock market.

Therefore, you must keep on testing and tweaking your system of investing in the market until you achieve your goals


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