New investors often hear stories a lot about fantastic returns in the stock market, causing them to expect too much. Although the stock market normally provides attractive long-term results, extraordinary profits are rare and losses are more common than many realize. With these simple stock tips, new investors can lay a foundation for success while setting realistic goals.
Let Simplicity Rule
Simple stock strategies often produce the best results. Reuters investors should pick stocks from companies with strong competitive advantages, keep a margin of safety and plan long-term holdings. Similarly, investors should avoid intricate data points, frequent trades, and far-flung predictions. Investors with a steady hand and an eye for the future will reap rewards.
Keep Realistic Expectations
New investors often have their dreams shattered when their money fails to quickly double or triple. In the wake of lackluster short-term gains, some people altogether abandon the stock market at the first sign of loss, while others turn to high-risk strategies. Stocks are volatile, so investors should expect significant ups and downs. Wise investors will expect to receive modest returns, to avoid disappointment.
Although most changes are natural functions of the marketplace, many reports try to associate stock market fluctuations with the news. Investors should avoid the temptation to react to daily headlines. Instead, they should patiently learn about the market and their investments, so they can trade with conviction.
Investors have options other than direct investment in the stock market. For example, Brad Reifler, founder of Forefront Capital, created an investment that is not tied to the stock market. Reifler created the fund to give middle-class investors a class of investments previously available only to large investors. Investors can enter the fund with as little as $2,500 and can add or withdraw funds every quarter. This fund can give investors a chance to manage volatility while improving their returns.