11 basic tips for investing in the stock market

 

 11 basic tips for investing in the stock market

Investing in the stock market can provide great results for a person who wants to invest their money. However, performing this task without proper guidance can generate, in addition to a major headache, the loss of money over time.

So it is important that you know some important tips and concepts for every investor who wants to start in this market.

The stock market is an environment where assets are traded, such as stocks, bonds and debentures.

First of all, it is important to clarify that, when it comes to investing in the stock market, it is not always referring to   investing “on the stock exchange” . Generally, these market negotiations do occur on the stock exchange; however, there are also other segments, such as the over-the-counter market - a market not linked to the stock exchange, where assets are also traded.

In principle, any individual can invest in the stock market, however, some precautions must be taken.

This market is more suitable for people willing to take a certain risk on the amount invested. They are applications that undergo several oscillations in very close periods of time. It is essential, therefore, that you seek information about this type of investment.

Our goal, with this article, is to present 11 valuable tips so that you can start your investments in the stock market safely and, above all, efficiently. Check out!

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1. Know your investor profile

First of all, find out if you are a conservative, moderate or bold investor.

The conservative is not very willing to take risks, he is more concerned with not losing money than with winning. For him, investing in the stock market may not be indicated.

The bold is an investor who, in order to guarantee excellent profitability in his applications, is willing to take a high risk, as long as he compensates for the gains he obtains.

The moderate investor, on the other hand, is one who brings together a little of the characteristics of each of the previous ones. He is even willing to take the risks of a good application, however, not as much as the dashing one. It has a certain risk restriction, but not as much as the conservative.

2. Define the capital to be invested carefully

Do not invest all of your capital in a single type of stock at once. In addition to taking a very high risk, it is interesting that you try the market for some time before entering with higher values.

3. Diversify your investments

In this case, it is interesting to quote that old saying: "don't put all your eggs in one basket." After all, if the basket is lost, all the eggs are gone with it.

Diversifying is a strategy that works very well, however, it is not a rule and must also be done with certain limits, as we will mention in the next topic.

4. Be moderate when diversifying your investments

Yes, you will never leave all of your money invested in a single stock or bond. However, this does not mean that you must have an unlimited number of applications.

By doing so, you will hardly be able to manage your entire wallet, and you will run a huge risk of losing money.

Experts say that owning about 8 to 10 shares is a good number to have in a portfolio.

5. Do not invest in companies located in “foreign” countries

Companies located in emerging countries, a little or very exotic, with a limited history of solid performance in the financial market, generally have greater risks, which ends up making the investment not worthwhile.

6. Do not invest in companies that close at a loss

It seems a little obvious, but many investors still do that. Investing in companies that have financial difficulties, hoping that one day they will return to profit, is not a good idea. Not least because there is no guarantee that this company will recover in the future.

7. Ensure liquidity in your investments

Another tip that seems quite predictable, but it is not. There are still many investors who do not pay attention to the liquidity of their investments, which allows for future sale, if necessary, or if a good opportunity arises, with greater ease. It is always good to pay attention to liquidity when investing in the stock market.

8. Watch out for “hot tips” on investments

Know that there is a lot of bad and wrong information in this market. Beware of the “hot” tips and information on investing in the stock market, as most of them are wrong, and even those that have a certain truth, should be analyzed with caution.

Inside information in this market is considered a crime. No one can know about buying and selling any type of security or stock before it is communicated to all investors.

9. Look for cheap stocks from good companies

Many do not pay attention to companies that have less competition from investors, but which are good investment options.

Look for companies that have cheaper shares, but that can be considered good companies for investment

The periods of crisis and economic recession are great for buying cheaper shares, the problem is that most inexperienced investors despair at these times and end up losing opportunities.

So, search for these companies, they exist! Nothing like good old study and a lot of research to find them.

10. Know how to select a good broker

This step is essential to succeed in your endeavor in the financial market, because a bad broker can cause you inconvenience and even losses. It is also important that you know the brokerage services available on the market, as well as the fee charged by the company to carry out this intermediation.

There are two types of charges: the brokerage fee and the custody fee. Each company has different rates, select the one that best suits your needs.

11. Be calm and patience

The final tip has more to do with the investor's mindset than with the financial market itself. You need to know that this business takes some time to deliver the expected results.

Therefore, it is useless to make hasty decisions in the eagerness to obtain profits in a very short period of time.

Investing in the stock market is a very successful process, but they will certainly appear over time. So be patient to wait and know how to identify them.