The best strategy for a beginner stock trader will be to take the long term approach to investing in stocks. You may have heard of people who made a killing by investing in some new stock that suddenly took off or you may have seen reckless traders in Hollywood movies that get rich overnight. However, the truth of the matter is that most of the money made in stocks comes from years of investing in a slow, steady and logical manner. Trading in stocks is a marathon and not a sprint. In this article, we’ll talk about stocks to buy if you’re a long term investor.
* Don’t buy penny stocks
People often mistakenly believe that they’ll lose less with penny stocks. This is a misconception. After all, if you lose your money… you lose your money. You’re better off investing your money in stocks that cost at least $15 a share.
Companies with stock at high prices are generally stable, doing well and appreciate over time. This is very different from small companies with cheap stock that are volatile and tend to result in losses. Long term investors will do well to buy shares that cost more. Over time, you’ll have handsome dividends and your stock’s price will most probably rise.
* Ignore ‘insider tips’
Often, you may come across hot tips or insider secrets that are passed around regarding events that may affect the price of the shares. While some info may be on the mark, more often than not, it is all hearsay. There are many cases where people have invested a lot of their money on stocks based on tips that didn’t pan out. So, beware of this pitfall.
When taking a long term approach to investing, you want to learn as much about the company and industry as you can. Buy stocks in companies that you understand and feel an affinity towards. If you buy stocks in a company you don’t understand, it will be tough to make decisions about buying and selling later on. You will not know when is the right time to do anything because you don’t have a grasp of what affects the market and prices.
* Keep an open mind
While blue chip stocks and reliable companies are safe bets for the most part, once you have a diversified portfolio that is stable and doing well, you may want to look at small-cap stocks. There is no denying that the small company today may become a large one in time to come. So, it’s a good idea to keep an eye on promising start ups too. Once again, you need to know where you are in your investment journey before you make any commitments.
* Sometimes it’s not too late to get in
Since you’re taking the long term approach, sometimes it may seem like a stock has gone up by fifteen fold and you’re probably too late. However, it will still be a good idea to research the company and look at past performance as indicator of future performance. You may be surprised but you may still see your stock price increase several fold over time because the company is doing well and there is lots of room for growth. So, don’t assume that all is lost because the price has increased several times over. You still have time on your side. These tips will guide you on what stocks to buy for long term investors. Plan well and follow your plan. Over time, you will have strong investments that reward you many times over.
One of the best ways to speed up your investing success is to simply copy success. Someone who actually invests himself, who has a proven track record, and who is prepared to show you EXACTLY what stocks he invests in every day is Grant Gigliotti.
>> Check out his results with BTMA Wealth Builders Club