Four Tips for Getting Started in the Stock Market.
Tip 1: Conduct research.
Research remains a fundamental key to successfully purchasing stock. Analyzing stocks can be difficult for some, but when researching, focus on trying to find the answer to four questions: Are there any red flags? Is the stock affordable? Who are the competitors? What is the company's history or reputation?
Tip 2: Concentrate only on liquid stock.
Liquid or Liquidity means stock can be sold without any major price changes and is more likely to maintain its value when traded. The benefit is that a buyer or seller can buy or sell a thousand or more shares for a price at their quoted value.
Tip 3: Invest in and trade stocks that you are familiar with.
The best stocks to buy are those from companies you are already familiar with or who use their products or services. But it’s equally critical to separate the stock from the company. Meaning, do not carry out decisions based on feelings but focus on the data. This is why researching and focusing on the four questions below are essential:
1. Are there any red flags?
2. Is the stock affordable?
3. Who are the competitors?
4. What is the company's history or reputation?
Tip 4: Don’t Panic Sell
Panic selling is precisely when someone begins to panic when stock prices drop and, as a result, begins to sell their stock at an unprofitable price. Always remember that you only lose when you sell, so always buy low and sell high. Stock prices drop and can be inconsistent, but you have to learn to get over the fear. Patience is a must to be successful in the stock market.
Additional Tips for Research:
Avoid Investing in Volatile Stocks
Dividend payout ratios
Follow the market trends.
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Dr. Jacob Caldwell Ph.D. – Guest Writer
Data Scientist & Financial Expert
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