Chapter Title:
Start Investing
Book Title:
Synopsis
It does not matter how much money you have in your account that you can use for investing. When you are a beginner, you should always start small. In fact, it is recommended that you first use a demo account, so that you can test the water without risking any money. This will also give you a chance to learn how to properly navigate your broker’s platform.
Always start small. Your objective is to familiarize yourself with the actual practice of buying and selling stocks, as well as to develop a winning strategy. Do not worry, once you have a reliable strategy in place, you can always increase the amount of your investment, which will also increase your potential profit.
Diversification
Diversifying your investment is one of the best ways to minimize your losses. As they say, you should not put all your eggs in one basket. The reason is that no matter how much you study the stock market, it can only increase our chances of success. But, it can never guarantee the return of positive profit. In fact, there is a possibility that you may even lose your investment. Investing in stocks has its risks, just like any other profitable investment opportunity. By diversifying your investment, you can lower your risk and minimize your losses.
There are different ways to diversify. The most common way is simply to purchase stocks from different companies and not place all your money in a single company. Another way is to diversify by industry. Industries rise, and fall and such is outside of your control. An industry that is well and blooming today may no longer be considered a profitable investment by tomorrow. Therefore, scatter your investment over different industries.
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