Evidently, one of the most profitable and easiest ways of growing wealth over a long period of time is by owing stocks. In fact, every Forbes 400 list holder has been bagged by a large portion of shares in either a public or a private firm. However, not everyone is the master of this trade and knows the tactics and tricks of investing in stocks. If you are one of those, read below to discover how to invest in stocks:
• Invest only when you have: The most important asset you require for investing in stocks is "money." Thus, a person should not invest in stocks until he has a secure job and a decent amount in their bank balance to sustain his daily expenses for a period of about 6 months.
• Get to Know what "Stock" is: Before getting your hands on investing in stocks, it is very important that you have a basic idea about the terms associated with stocks. Thus, read different books related to stock investment before actually plunging into the real market.
• Think before you invest: One of the most successful executives of the world remarked once, "Always think again after thinking once." Only if you can pen down enough reasons for buying a stock, you should buy it, or else you should not.
• Practice makes a man perfect: When asked about how to invest in stocks, one of the most viable answers that emerge is "through practice." Always practice trading stocks on paper, before using real money. Begin with recording the stock trades, the trade dates, the share number, prices, profit rate, loss rate, etc. Only when you are comfortable with trading on paper should you start trading with real money.
• Find a good broker and open a stock brokerage account: This rule runs completely on a trial and error basis. Figure out a good broker based on his commission charges, total involved fees, the online reviews, etc.
• Create a small portfolio of about 30 stocks: Carefully analyze the stocks of various companies and select the top companies, which have come up with at least a little earning in the past ten years and have paid some dividends in the past 20 years approximately. Once you have sorted out the list, you can head towards making the investment.
• Stay updated: Most importantly, stay updated on the various investing websites like Fallen Angel Stocks or Motley Fool for getting information about the latest deals in the stock market.
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