Even though the stock market is a place of uncertainty there are tried and tested strategies that can help you improve your odds of achieving long-term success.
Investors should first define their financial goals. For example, saving for retirement, buying an apartment, or financing the education of your children. That will help them determine the amount to invest in the market and what kinds of investments are appropriate for their needs.
Prioritizing the building of an emergency fund or paying off loans with high interest before investing heavily on the market is also smart. Start with a small amount and then increase your investment over time as you gain experience.
One of the biggest mistakes beginners make is to try to time the market, Keady says. Keady says that nobody knows when the perfect time is to invest.
If you’re just beginning your journey, it’s a good idea to invest in firms that you are familiar with. Peter Lynch, the legendary Fidelity Magellan Fund manager, once said that you stand a more chance of success when you invest in companies that have a proven performance and growth prospects.
It’s also a good idea to stay clear of websites and advertisements that promote sure-thing stocks. They’re often part of a pump and dump scheme where unscrupulous individuals purchase buckets of shares of a shady company to push prices up, and then dump their shares for their own profit.