The stock market can be a tricking thing if you don’t know what you are doing and there are a few things that you must know before investing in the stock market. Before I start, I am not giving any stock advice or telling you what to do. please do your own research before buying anything on the stock market.
Now I would say that there are 3 things that you need to know before investing in the stock market. People may have different rules or different knowledge about the stock market but these are the ones that I thinks will help people investing in the stock market and it helps build a better plan for your investing. Let’s see the required knowledge to invest in the stock market.
Don’t place all of your eggs in one basket:
The number one thing that you may be hearing online or just in the world is you don’t place all your eggs in on basket meaning in the stock world is that you don’t buy all of your stocks into one company. If something happens to that company then you lose all of your money. This is why you should have stocks across different companies and sectors as well.
If you only invest in the hotel sector, in march 2020 the hotel sector took a big hit and a lot of hotel companies loss a lot of money and they had to lay off people. If you only invest in that sector than you took a big hit. it may come back around but we don’t know that but if you invested some here and some there than you would be better off. So I tell people, please don’t fall in love with just one stock and place all of your money in that one stock, have more than one stock that you invest in and I have around 20 stocks that I invest in and looking for more every day.
What is your goal in the stock market:
I say online that people wants to start investing in the stock market and some of my family wants to invest but they don’t know where to start and they don’t have a game plan or goal. There are a few ways to make money in the stock market. you can buy stocks at and low price and sell them.
You can invest in growth stocks that can grow in price over time then sell in the near future and you can get passive income with dividend investing which is something that I do. My goal in the stock market is to build dividend passive income to $500 per month so that money can pay my light bill, my water bill, and my cell phone bill. That is my goal for the stock market so what’s your goal?
What do you want to do in the stock market to build wealth over time? People don’t know what to buy when starting in the stock market and I tell people to buy the things that you already buy today. If you shop at Walmart, then buy some Walmart stocks. If you like Nike and buy Nike shoes, then buy some Nike stocks. Do you want some passive income? Then I would look for great companies that pay a dividend and invest in them. Every person has a different goal in the stock market and sometimes that is based on how old you are. If you are a young person, than investing into growth stocks may be better since you have a longtime to see them grow.
If you are older, then growth stocks would not be good and I would invest into dividend stocks to make money per month or quarter. Based on your life, you invest on what you want to do. I plan to retire when I hit 40 years old and right now I am 34 so I have 6 years to go and I should invest in dividend paying stocks for that passive income to live off of so write down your goals.
Do your own research before buying anything on the stock market.
Before buying anything on the stock market, please do your own research and your own homework on the stock that you want to buy. Learn how to company makes money and how well is the company doing today. You can go on YouTube and Google and https://seekingalpha.com/ to do more research before buying anything. This is the most important thing that you can do.
