Top 5 Tips for Stock Market Investing
If you are new to stock investing, there are many key principles to learn. Here are my top 5 things to know when investing into the stock market.
1. Focus On the Long Term
Set a budget and deposit those funds weekly or monthly on a consistent basis. You may not get the best deal today, but in 10+ years you will have growth with the right companies. Don't get emotional over the small ups and downs of the market. Remind yourself what growth you will have in 10+ years from now.
2. Get Excited About "Red Days" or Down Days
Red days are when stocks experience a correction or dip. This downturn is an opportunity to get a discount on your favorite stocks. For some reason many people feel they are losing and they sell their positions on these days to preserve their money. Those who purchase stocks on these days will have steady growth for the future. To purchase on these days you need to have some cash on hand.
3. Avoid The Hype
Game Stop, Bit Coin, are very volitile and not ideal for my risk level. Dividend stocks are slow growing and consistent. The payouts come in a predictable manor every quarter and the cash flow can pay for my lifestyle for the long haul. On that note, buy stocks you've done your research in and you feel comfortable with.
4. Amount of money invested is more important than the percentage gained
One who invests $5,000 and is up 100% now has $10,000. One who invests $100,000 and is up 10% now has $110,000.
It's very important that you invest and get your money working for you while you sleep. I invested $100 into (AMC) in March 2021 and doubled my money to $200. It's exciting to get those types of returns but unfortunately it isn't going to move my stock portfolio very far in the long run because I only put $100 in. Ideally I'm buying larger amounts of stocks that will make more money over the long haul.
5. Appreciate The Portfolio You've Built
It's so easy to compare ourselves to others who have larger portfolios, get better deals and make better decisions. The important part is that we are investing and our money is growing. In the end we will be prosperous!
Get Familiar With Strategies
It takes time to learn the strategies. Dividend investing, dollar cost averaging, evaluating the balance sheet and more. There are many and they will come over time as you get motivated to deep dive into these principles. For my 401k I'm investing in index funds and total market ETFs which is a very limited selection. For my stock portfolio I'm investing more into dividend funds for those quarterly dividend payouts which you can live off of in the long run.
How To Get Started? Here are my favorite investing Apps.
Start off by trying out these popular 3 to compare and learn more about these tools. I can't tell you which stocks or ETFs (Exchange Traded Funds) to buy but some great starters are VYM, VOO and VTI. The key is starting.
- Sign up for free @ Webull and we both get free stocks.
- Sign up for free @ RobinHood and with both get a free stock.
- Sign up @ M-1 Finance get $30 intro sign up bonus.
Note: I am not a financial advisor. Here I'm sharing my financial freedom journey. There's certainly risk involved in investing, so do your research or consult with an financial advisor.