Investing in the stock market can prove to be one of the most rewarding things you could ever do. Just look at Warren Buffet. Over the course of several years he was able to turn himself into one of the most successful investors in the world.
What most people fail to realize is Warren Buffet did not become a successful investor overnight. As a matter of fact, according to BusinessInsider.com, Buffet made 99% of his wealth after the age of 50.
With that being said, let’s dive right in and talk about the 4 investment success tips for the complete beginner.
#1 – Be Patient
Becoming a successful trader takes time. And while there are numerous courses and guides that can help you cut your learning curve in half, at the end of the day experience is still the best teacher. So be patient. Eventually your investments will start to pay off.
#2 – Be Prepared To Take Some Losses
Ideally you would want to make a profit on every trade you make. Realistically however that won’t happen. There will be good days and there will be bad days. Make sure you are prepared to take some losses.
In part two of this guide we will talk about stop loss orders and how to use them to minimize your losses.
#3 – Pick The Right Brokerage
As an investor the broker you choose to work with will play a huge role in your overall success. It is therefore your responsibility to ensure you are working with a reputable broker. Do your research and make sure they have a good track record.
Some of the top brokers that offer you the best value for your portfolio include TD Ameritrade, TradeKing, Fidelity and E-Trade.
#4 – Never Get Emotionally Involved
As a trader you must leave your emotions at the door. The absolute worst thing you can do is get emotionally involved with the stocks you are trading. When you trade based on emotions rather than analytics, you will almost always find yourself on the losing end of the spectrum.
Before you make your first trade take the time to write out a set of buying and selling rules you will follow. It is very important you stick with these rules for every trade you make and avoid allowing your emotions to get in the way. As you become more experienced you can adjust the rules to better suit your trading style.
Also read the following related articles:
How To Become An Expert Trader Part 2 – 5 Things You Must Understand
How To Become An Expert Trader Part 3 – Fundamental Analysis vs Technical Analysis
How you can avoid the top 5 common investing mistakes
Here are top 5 common investing mistakes