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Investing during these times must feel strange. Should you save for a sickly rainy day or place your bets on the stock market? Don’t fret if you don’t know what to do. These are still hopeful and interesting times, and we will help you get through your “first-time investor jitters.” Granted, you won’t be an investing genius by the end of this article, but you will have already invested in something quite important: yourself. Therefore, don’t feel wary as a new investor dipping your toes in the stock market waters because you’ll be able to manage swimmingly with the following tips.
Tip #1: Start investing as early as you can.
It doesn’t matter if you’re working at your first part-time job and what you get from it is meager, to say the least. Save a portion of it for future investments. Doing this early in your life will also help develop your financial mindset and spending habits. Invest as soon as you are able. Open a brokerage account and put something in, no matter how small.
Tip #2: Do not invest blindly.
Pick a sector or industry you know well or at least have some working knowledge of. To get the edge up on the competition, you need to invest in areas or companies you know well to get higher returns. So, take a breath, think about it, and assess the areas or companies you know well. Research your potential investments well; otherwise, you’ll be researching how to start a class action lawsuit instead. Remember, it’s perfectly okay to stay in your comfort zone (for a time). Younger investors could invest in artificial intelligence, cryptocurrency, dating apps, gaming companies, search engines, and other tech businesses or companies. More mature investors could invest in hotels, real estate companies, index funds, and more conservative choices. However, regardless of your age or the risk involved, if you know your stuff well, chances are you probably have a good idea of what businesses or companies will take off and be successful.
Tip # 3: Steel yourself for anything.
One thing that separates the average investors from the quality investors during these times is emotional resilience. Be reliably stable. The people in your life and your finances will surely appreciate it. Take that advice, apply it, and relate it to investing. You have to be prepared for any outcomes and all possibilities. What happens when the stock market crashes? Will you crash as well? Don’t be a typical investor. Don’t just feel happy and über-positive when you see your invested stock prices go up, especially after checking them regularly, and then become forlorn and morose when you start “losing money.” Getting caught in the ups and downs of the stock market is a rookie mistake. A small percentage of investors that have done well throughout the years are the ones who do the opposite. They don’t allow themselves to be affected by the lines and points on a graph because they know it’s all temporary. Over the long-term, they know the lower the price that they buy into stocks, the higher their returns will be. Remember, even when stock prices go down, you can still win because you can buy more stocks at lower prices. Winning in the stock market is always possible as long as you don’t sell your stocks for cheap during a slump. Unfortunately, some investors panic and do the wrong thing.
American value investor Peter Lynch said, “Know what you own, and know why you own it.” You see, most investors want to make money in every industry. So they want to get their hands in every money pot they can find. But, unfortunately, it is rare for those types of investors to truly understand what they own and why they own it. Don’t be like them. You must know yourself and what you can offer so that your knowledge of what you have and what you have accrued will hold water. Do not just invest for the potential money and wealth you can get in a lifetime. Invest in yourself and your legacy – what the world will remember you for long after you’re gone.
Deinah Storm used to work in the corporate world as a marketing affiliate. She quit her job to pursue her passion for writing, but to this day, Deinah is committed to educating consumers about the different marketing scams and how to avoid them.