While the market is rife with uncertainty, certain tried-and-true principles can boost your chances for long-term success.
Investors should first define their financial goals. For example saving for retirement, buying a house, or funding the education of your children. That will help them determine the amount they should invest in the market and what kinds of investments would be appropriate for their needs.
Prioritizing the creation of an emergency fund or repaying high-interest loans prior to putting your money into the market is also an excellent option. If you do have funds to invest in the market, start small and gradually increase your investments as you gain experience.
Keady explains that one of the most common mistakes made by novices is to try to time the market. Keady says that nobody knows when the right time to invest.
When you’re first starting out, you should concentrate on stocks of companies you are familiar with. As the legendary Fidelity Magellan fund manager Peter Lynch famously stated that you stand a better chance of winning if you bet on companies that have a solid track record and solid growth prospects rather than trying to predict the future.
Avoid forums and advertisements that promote stocks that have a high chance of success. They are usually part of a pump and dump plan, where shady individuals buy buckets of shares of a poorly traded company to push prices up, and then take their shares away for their own gain.
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