Keeping your money in a Savings account is a good idea to secure it. But do you know that due to inflation, every year, money looses its value, and a million dollar today would be less valuable 20 years from now.
Basics of Investing in Stock Market
Thus keeping your money stagnant or earning very small interest rates from it is not at all a good idea. Investing in money growth schemes like mutual funds and stocks is a good idea to tap the hidden potential of your money. Remember, money builds more money.
But investing in stocks is a very complicated affair and needs a thorough understanding of the markets and the behaviour of various stocks. Here are some of the basic investing stock market tips that beginners must keep in mind before investing in the stock market:
• Invest in stocks only when you have enough savings in your account and you have a stable job. Try and keep a years salary as savings in your account in order to keep you away from harm in times of economic crisis.
• Earn adequately before investing — The stock markets are capital intensive and you do not expect to earn a lot by investing low. You must invest a handful in order to reap the benefits from the markets.
• Do not just jump into the markets without having any know how about the basic framework. The stock markets are just like a science and they also work on some fundamentals which need to be studied. Learn about stocks and markets. How do they vary? What affects them? How does Crude oil Prices have an effect on the value of a Dollar? Go through whatever Literature you may come across and study it thoroughly.
• The best basic investing stock market tip is to start off on paper. Make a virtual portfolio of yourself and buy and sell stocks on paper. Record all your moves and the reason behind them. Analyse the results and the net valuation of your portfolio after a session and assess the success that you have earned. If it feels comfortable for you to jump into the markets then do so, otherwise continue until you are satisfied.
• There are a host of games available online which simulates the market conditions without you having to invest in reality and lets you play them for free. They also provide you with a host of tips to further increase your output.