Rules Every Beginning Stock Investor Should Know

Many people turn to the stock market with the promise of easy money. But at the same time, many people turn to casinos for the same thing. If you are a smart investor, then real money is possible. It will come slowly however, over time, and at regular intervals. If you follow the rules of the stock market, the rules that are the same no matter what, then you might be successful, and you won’t be making someone else rich.

Every investor is a gambler, but the difference between good investors and bad investors is that your investment should be made with logic and reason.

1 – The Right Way Take Risks vs. The Wrong Way

At the end of the day, investing is gambling, and gambling is a risk. When done well it is a risk that is mitigated, calculated and made with all the facts. But no matter what, it is still a risk. There are no guarantees. Even the ‘sure things’ have the potential to go wrong. An example of this is municipal bonds, widely considered to be ‘risk free’. But in 2005, when Hurricane Katrina struck, many Louisiana municipal bond holders found their investment, that was ‘risk free’ was worthless.

2 – Always Know The Basics Of The Stock Market

“Stock” is the ownership or a portion of a given company. An investor can buy “shares” of stock. The company that sells the “stocks”, and “shares” uses the money to expand. A successful company will see its stock go up. Their shares will become more valuable. Using smart stock investing, an income can be created without the shareholder doing work, or selling something. Any investment must be built on the basics.

3 – Understand Mutual Funds

Most investors are small time, and so will seek to pool resources, as well as diversify their holdings. This is why they will flock to mutual funds. These are portfolios that are managed by a professional. They buy & sell things like bonds and stocks, using their own insight, and research. The holders of the funds get instant diversification. Their money is in the hands of the experts without them having to hire a consultant. There are some downsides however. The experts are usually anonymous, and the funds come with various fees. There are usually a variety of rules around the withdrawing of the funds. They are easy to use however.

4 – ETF’s Are The Way To Invest

An ETF, or an exchange traded fund, is a mixture of mutual funds combined with the flexibility of normal stocks. They take the guesswork for investors who many not be positive. They can be sold and bought in shares, at any time when the exchange is open. They are traded directly on the exchange.

It doesn’t matter which investment you choose, there are always drawbacks as well as benefits.

Always research. You must learn the basics of the stock market. Taking a tip you heard at the store is not the way to success. Take it seriously, invest in a consistent way, and never invest money you cannot afford to lose. Many people have become very rich, very quickly on the stock market. But for most, being slow and cautious will provide the most success.

In our Free Stock Market 101 Course, we teach you step by step the rules of the stock market and how to invest correctly.  With the logical steps we teach you, you’ll be able to make safe consistent money on your investments instead of gambling without any idea what the outcome might be.  We hope you’ll join us!

December 16, 2014

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