Stocks represent shares of ownership in a company. When a company makes a profit, company stockholders profit too. If you are a beginner interested in investing in the stock market, there are three basic principles you should be aware of before you get started.
A Diversified Portfolio is Recommended
Investing in the stock market is a gamble, but there are ways to minimize your risk. One of the easiest and most effective methods is portfolio diversification. Having a diverse portfolio means that you don't put all of your eggs in one basket. In other words, you own stocks in different companies (preferably though different industries). This way if one company's stock declines, you still have a chance to make money with the rest of the stocks in your portfolio.
Investing Regularly Will Increase Your Profits
If you want to makes real money in the stock market, you need to save and invest regularly. This is known as dollar cost averaging, and it works amazingly well over the long term. For example, if you invest $1,000 in stocks, you will most likely have approximately $2,000 ten years later. If, on the other hand, you invest $1,000 every year for ten years, you'll end up with $14,000.
Investing for the Long Term is the Best Way to Make Money
Stock investing is a way to grow you money over a long period of time, which means it is important to be patient. It takes an average of ten years to double your money in the stock market. If you can't wait that long or if you will need to tap into the money you are investing in the near future, stocks may not be the ideal investment vehicle for your situation.
See Our Top Recommended Company for Stock Trades Online and Find Out How You Can Get Free Trades. Visit stocktradingsanity.com for more tips about online stock trading for beginners.
Article Source: http://EzineArticles.com/?expert=L._Sampson
Tidak ada komentar:
Posting Komentar