The stock market is complex and can often be tricky to navigate, especially if you’re new to stock investments. Most investment experts agree that knowing the fundamentals is often more important than knowing tricks and shortcuts. Make sure you’re familiar with these tips before working with investments, or taking on the navigation of the stock market on your own:
Loss: as the term implies, this is when you lose money on stocks
Capital: the funds from stocks are what companies use for growth, these funds are referred to as capital
Common stocks: these stocks secure voting rights within a company, but not necessarily guaranteed payments
Preferred stocks: these stocks do not secure voting rights, but they do guarantee payments
Equity: this is essentially what you purchase with a stock – a share of the company
These three basic tips should help you get your footing in the stock market, and make good choices regarding stocks you own or want to own:
Cut your losses.
While easier said than done, it’s important to know when to throw in the towel. By quitting when you’re ahead, you’ll be much less likely to continue on a path that is only going to lead to eventual loss, even if there are some short-term surges. While a minor decline in one or two stocks is not concerning, seeing a general decline in multiple stocks should be of concern, and should be your go-ahead to sell those stocks. Generally you will want to sell if you’ve lost 15 to 20 percent of a stock’s value.
Don’t worry about the winners.
Even as you’re mourning the loss of one or possibly multiple stocks, there will no doubt be shareholders who are profiting quite well from their stocks. This is just how the market runs, and you need to be at peace with that, and not waste money and time trying to keep up with them.
Follow the market trends.
The best way to know how stocks are performing and how they might perform in the given weeks or months is by keeping close tabs on the stock market.