5 Killer #Stock Market Tactics for Beginners

Monday, May 8, 2017

It is the propensity of humans to search for ways to make easy money with little to no effort or time. No wonder lottery tickets have been such a hit! But we cannot bet on a lottery ticket for a consistent income. The latest tool that people look up to is the stock market. It’s important to note however that the stock market is not all about luck and it requires certain amount of tactical thinking and planning to make it work in your favor.

If you’re a beginner, then there’s several things you need to be aware of when investing in the stock market. Here’s 5 tactics to help you get started.

Build Your Fundamental Knowledge

While there will be brokers and other financial advisers to take you through the process of trading, it is always beneficial to keep yourself educated on the basics in the world of the stock market. Stay updated on the metrics, some of the important definitions like EPS and CAGR, the type of stock market orders, various investment accounts, the analysis done before investing, etc. When equipped with better knowledge, you are putting yourself in a better position to avoid or mitigate any risk that you masy encounter in your trade, like fraudulent advisers.

Diversified Investing

This is one of the most crucial mantras in stock market. It is better to ensure that you have your exposure split across different markets so that your total investment doesn’t suffer, even if one or two of its components make a loss. With diversification of your portfolio you are effectively cutting down on your losses.

Don’t Get Emotional

There are always questions to be answered, such as if this is the right time to buy or sell, if you should wait for another day before cashing in and so on. When you have to find answers to such decisive questions, make sure that you have the expectations set right, especially when you are buying a stock. Make your decisions based on logical interpretations of the situations and don’t let your emotions override your decisions. Also keep a strategy ready for exit at the time of purchase.

Compare Brokers

Like every other business, stock trading also costs you some money. One of the major cost factors is what you pay for your stock brokers. This however doesn’t mean that you hire the broker who is cheaper than the others. Good things often do not come for a cheap price. However, you can make a better deal by comparing different brokers and finding who would best suit your requirements. There are websites that can offer you broker reviews to give you a better comparison.

Don’t Invest What You Need

You should always consider a scenario where you lose everything you invest and ensure that you are well prepared to handle that situation. While that may not happen, it is better stay prepared for the worst. Therefore, do not invest any money that you will need to pay your bills or for your other expenses.
Stock market trading is not as daunting as it sounds, but it’s important to ensure you stay strategic and use the best tactics if you wish to make the most out of it.

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