A Few Tips Before Investing

For many investing in the stock market and the forex market can be daunting without the help of their advisor.  There are trader networks out there like CMC Markets that have a great deal of education and analysis which can ease some of the anxiety of investing.  Sure we are all hesitant to put our money into something that might come back lower than what we put in, but we all are hoping for the upside where we withdraw at a higher amount than deposited.  Take a look at the few tips to ease yourself into investing.

Examine Your Personal Financial Situation

You need to know what your risk preferences are and what you can potentially go without should the markets take a turn for the worse.  If you do not have adequate funds at the moment, that doesn’t mean that you cannot invest at a later time, you probably just shouldn’t be doing it at this time.  Nobody knows your situation better than you.

Diversify

Anytime I hear this line I think of line in the movie Nothing To Lose.  Anyways, you do not want to put all your eggs in one basket.  Take for instance some former Enron employees they were heavily invested in the company stock, then it went belly-up and they were worthless after that.

Research, research and research…and Realize it might be a bumpy ride

As I mentioned above man y trading companies have a great deal of research on their sites.  Select one that you are comfortable with and do some research. If you want to go with an advisor I would still do research because ultimately your best interests lay with yourself.  Before investing you need to take a look at the market as a whole and where you see it going. If you see it going down you may want to invest in safer securities.  Either way there will be ups and downs so just be prepared to ride out the storm…  We kind of did that this week when Hurricane Sandy came through.

Any investing horror stories?  Any other tips before investing that you found valuable?

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Comments

  1. Now I’m curious….what’s the line in the movie?

    • @ Joe – Nick (imitating his boss Philip): Diversify. You can’t trust banks, Nick. The entire system could crumble at any second. That bastard´s so heavily leveraged, it would wipe him out.

      There were in the Tahoe driving out in the desert.

      Good Movie and very funny if you have never seen it. I have watched it too many times unfortunately and can almost recite it.

  2. Just one horror story: about two weeks ago, I bought a share of Apple stock and it’s been dropping like a rock! I acted on two theories, (1) buy something you’re interested in and (2) Apple always makes a killing during Christmas. Hopefully it’ll rebound in the next few weeks because I’m having trouble deciding if I should sell or keep.

    By far my best investments have been diversified. I’ve made a 38% return on my index fund investments over this economic recovery, and my retirement account life-cycle funds are doing decently, too. All of my individual stock purchases have lost me money or broken even, so I don’t think it’s the best strategy for me.

    • @ GB – I hope it goes up for you. I like your theory and I hope you make a lot. Just remember me 🙂

      Wow 38% return in the down economy. That is amazing!!! Care to share what fund you are invested in?

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