How To Start Investing For Beginners

Success in investing doesn’t happen overnight. Your investment portfolio is a lot like a garden. A nice garden takes time, energy, and attention to grow its appeal.

The Dos Before Investing

1. Get Your Finances In Order Before you start investing, understand your needs so that you are financially ready.

2. Decide How Much And Where To Get The Money To Invest Pay Yourself First. Make this your motto so that you can save a portion (10%-20) of your paycheck for savings.

3. Understand Your Risk Tolerance

Risk tolerance refers to the amount of loss that you can handle while making an investment decision. All investments carry risks. Some investors are willing to take higher risks in exchange for anticipated higher returns.

Don’ts When Investing

1. Don’t Be Greedy When you invest long enough, you know favorite stocks that go up often come down. You will want to replace greediness with financial discipline.

2. Don’t Concentrate Your Money In One Stock Or Asset This factor is the risk you take on when you are not adequately diversified. Concentration in one stock, one industry, or longer-term in one asset class is risky. Sometimes one stock may have performed far better than other stocks and now is outsized in proportion to your holdings.

3. Don’t Fall In Love With A Stock At times, you may feel some affection for a stock that trades beautifully, and you wish your entire portfolio will react like that name. The company management and fundamentals are above-average in a desirable part of the market. Don’t be blinded by what you may believe is the stock’s “never can do wrong” attitude.

4. Don’t Be Emotional When Investing The most experienced investors come upon times when their egos or other parts of their persona get in the way of their investment judgment.

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