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Hi Taylor
- I've been setting aside money that I want to put into stocks… but
I've recently realized I have no idea how to do that! I've done a
little research but it's mostly made my head spin, so I'm hoping you
might have some advice for a beginner. What's the best way to get
started? - Mindy
Hi Mindy - There's a ton of info out there, isn't there? I've
spent countless hours investing in and researching the stock market,
and there are still times when I'm left scratching my head. There
are a lot of different ways to approach this market, so I'll give
you a few general concepts that I find useful. |
1. Don't
day trade. I strongly, strongly advise you to stay away from
this practice. While a few people have enough experience and insider
knowledge to make day trading work, the vast majority of people
end up losing money this way. It can be fun and exciting and you
might hit a big winner, but doesn't that sound the same as playing
roulettein Las Vegas? I don't recommend this type of investing
to anyone, let alone someone who's just getting started. The stock
market should be used as a tool to grow your money, not as a get-rich-quick
scheme.
2. Know who you're investing in. You don't need to know them
personally, but, at the very least, you should know a few things
about the company of which you're becoming a shareholder. It's
easy to get excited about hot tips coming from so-called experts,
but you don't know exactly what motivates these experts to give
those tips, nor do you know if they're actually experts. If you
do your own research and learn about well-run companies working
in blossoming markets, you can make educated decisions that are
more likely to pay off. It's best to buy shares in a company you
like; that way you won't be overly tempted to sell too quickly.
3. Don't overdo it. I keep about a third of my investment
capital in the stock market. Every broker everywhere will tell
you about the importance of a diversified portfolio, and I think
that applies to your overall investing strategy. Don't put all
your savings into stocks, and instead keep it to a moderate portion
of your funds. This is a safer way to spread out your money and
allows you to take advantage of other investment opportunities
that offer benefits Wall Street can't match. I've noticed that
this approach helps people resist over managing their shares,
which can be a dangerous and costly habit.
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The stock market
is a great tool for people who can show restraint and make informed
decisions. Asking questions is a great way to start, Mindy, so keep
up the good work!
© Taylor Kovar
February 15, 2019
More "Go Far With Kovar"
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| Disclaimer:
Information presented is for educational purposes only and is not
an offer or solicitation for the sale or purchase of any specific
securities, investments, or investment strategies. Investments involve
risk and, unless otherwise stated, are not guaranteed. Be sure to
first consult with a qualified financial adviser and/or tax professional
before implementing any strategy discussed herein. To submit a question
to be answered in this column, please send it via email to Question@GoFarWithKovar.com,
or via USPS to Taylor Kovar, 415 S 1st St, Suite 300, Lufkin, TX 75901.
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