It might surprise you to learn that a $10,000 investment in the S&P 500 index 50 years ago would be worth nearly $1.2 million today. Stock investing is among the most effective ways to build long-term wealth. We are here to teach you how.
Here are the top 5 investment tips used by the top-performing stock market investors.
- Derek says: Define who you are
As a beginner investor, the first thing to take into consideration is who you are in the investing world. You can try a quick ‘’get to know yourself’’ quiz.
Which of the following statements best describes you?
- I am an analytical person and enjoy playing with numbers and doing research.
- I hate math and don’t want to do a ton of “homework.”
- I like to read about the different companies I can invest in, but I don’t want to deal with anything math-related.
- I am a busy professional and don’t have the time to learn how to analyze stocks.
The good news is that regardless of which of these statements you agree with, you’re still a great candidate to become a stock market investor. The only thing that will change is the “how.”
- John says: Open an investment account.
Any great advice about investing in stocks doesn’t do you much good if you don’t have any way to buy stocks. My advice to you is to go ahead and open an investment account.
Many companies allow you to invest in several stocks at once for a small initial capital.
Opening a brokerage account is a quick and painless process that takes only minutes. You can easily fund your account via transfer or with your credit card.
- Patrick says: Buy Leading Stocks, Not Laggards.
A lot of investment coaches advise their clients to diversify. Diversification means having a variety of different types of companies in your portfolio. However, I would caution against too much diversification.
When you are just starting, I would suggest sticking with businesses you understand.
Buying showy high-growth stocks may seem like a great way to build, but I would advise you to hold off on these until you are more experienced. It is wiser to create the base of your portfolio with rock-solid, established businesses.
Which approach do you think will work best for you? Try one or all of them the next time you are investing.