The stock market is one of the most misunderstood when it comes to investing. In fact, before, the first thing that comes to mind when stock market is mentioned is trading. And trading for them is gambling. Thus, mere mention of it sends chill to aspiring investors. They would rather invest in some other investment vehicle than lose what they have in trading. But stock market is not just for trading (short-term), it is also for investing (long-term).
Stock market burns traders but not so much with investors. I am happy to see how people are slowly changing their mindset and gently opening their doors to stock investing.
Get Advice from the Pro.
Do not follow stock investing advice from friends, relatives and co-workers simply because they are close to you. Get it from the geniuses in the stock industry. They would not be in their shoes for nothing, right? Other people can tend to mislead you. Don’t be.
Trader or Investor?
Before you start, know first whether you want to be a trader or an investor. That will enable you to have perspective and focus.
Pick your broker right.
Brokers are the ones who will suggest what stocks to buy and sell and at what price. They are your agents who will execute all your stock transactions. They must be really good at it. Otherwise, prepare for disaster.
Buy low, sell high.
That is the rationale applicable to stock market. You buy stocks of a company that you believe will go high and give you profits afterwards. You can also earn dividends while owning some stocks.
Control your emotions.
Stock prices go up and down erratically. Do not expect to see a straight arrow up in your charts. Believe me, it will be a roller coaster ride so tame your greed and improve your patience. Do not let your emotions get in the way.
Financial education is key.
People buy beautiful and expensive things that eventually fade or depreciate. But only few invest in things that appreciate in time. People invest in good schools and spend a lot. They go to quality schools and shell out big money. But they rarely invest in quality books and seminars to get quality financial education and yield much more money.
In the stock market, getting yourself a good broker, exposing yourself to business news, reading trusted books, and attending helpful seminars can give you extra edge to retire a multi-millionaire.
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