Whether you’re a first-time investor or an experienced veteran of the stock market, you can always improve your performance on Wall Street. Here are just nine tips to ensure that you bring home the bacon.
1. Know What You’re Doing
Are you looking to invest with stocks, bonds or commodities? If you have no idea what this question means, it’s time to do your homework. You can’t hope to make money through investing if you don’t understand what investing actually entails.
2. Only Invest with Disposable Income
There are no return policies for lost money. Once it’s gone, it’s gone. For this reason, it’s critically important that you only invest with funds you can afford to lose. Don’t play around with next month’s rent or your child’s college tuition.
3. Start Small
There’s no reason to jump into the deep end right away. If your first investment is successful, you can always increase your quantities or open new accounts for round two. On the flip side, if you invest in 100 things all at once, there’s no way to get your money back if they all fail.
4. Research Potential Investments
Never invest in a company without doing a little digging first. How long have they been in business? How many branches do they have? What has their performance on the stock market looked like for the past six months?
5. Diversify Your Interests
This is also known as the “don’t put all your eggs in one basket” rule. Not only will making multiple investments increase your odds of success with at least one of them, but you also won’t have to worry about losing all of your money with a single tanking company.
6. Emulate the Successful
Follow the path of someone who came before you. For example, if you’re in the casino business, look at a man like stephen a. wynn. Research the investments he’s made, the portfolios he’s built and the risks he’s taken. Figure out how you can model your investing practices on his.
7. Don’t Panic
Most investors have experienced that swooping sensation in their stomach when a stock starts falling. The trick is to not let your panic control you. Can the company turn things around? Have they recovered from downswings in the past? Should you wait awhile before pulling out?
8. Expect Corrections
Some investors act like corrections are a shock, but the wise know that they’re always possible. Learn to anticipate them. Learn how to recover from them. If you have a plan in place before they tornado your stocks, you might still have something worth defending after the funnel dissipates.
9. Stay Focused
This goes for people who have failed on the stock market and people who have achieved wild success, too. Don’t get cocky, but don’t let your mistakes define you, either. The world of investing is filled with ups and downs, and you’ll probably experience both at some point.
These are just a few things to keep in mind as you try your luck in the world of investing. There are many more, of course, but these should be enough to get you started and help you accumulate the wealth you’ve always dreamed of having.