Invest Money Effectively In Stocks
The secret to getting an average return in the stock market is staying invested for a long period. The stock market can give an annual return of 10%, better than bank accounts or bonds when compared. But for this, you have to stick with it for the long-term. Many of you get scared of investing in the stock market as the prices go up and down. But the key to making money in stocks is to remain in it. Your total performance and time invested in the market predict the best price. Mostly many investors move in and out of the stock market, which may make them miss the best opportunity for annual returns.
To invest in stocks you need to have a brokerage account, it takes 15 minutes only to set up online. Here are some things to keep in mind to make money in stocks-
To make money in stocks investment, stay invested
More time makes more opportunities in your investment to bring the stock price up. Investment companies tend to increase their profits, and the investor will be rewarded greater with higher stock prices.
The companies can allow you to collect dividends if you stay for a longer time. But if you’re trading in and out on a daily, weekly or monthly basis of the market, then you can lose the dividends. And if you miss some best days you might decrease your annual returns, and you cannot predict when these periods are held.
According to the Putman investment – one of the best investment company in Boston, United States –
- If you miss 10 best days, your annual return will drop to 5%, in that period.
- If you miss 20 best days, your annual return will drop to 2%, in that period.
- And, If you miss 30 best days, then you lose your money (-0.4%annually).
The three main excuses that can keep you backward in making money –
- Wait until the stock market is safe to invest (when the price of the stocks are down and returns are high).
- I’ll buy it back next week when it’s lower.
- I’m bored with these stocks, so I’m selling it. This happens only if the investor wants more excitement in their investment. But investment in the stock market is a bored one as you have to stick with it for a long time.
Set Financial Goals and Choose Strategy
It’s very important to set your goals in financial planning. Keep a specific goal and focus on it, for example, you’re planning to retire after 30 years and start investing at age 30. Make sure you start your investment as soon as possible.
To become successful in stock trading, the thing you need to keep in mind – the value of investing is an important asset in the stock market investment.
The growth investing comes second on the list. Which means you should search for companies with strong future growth potential. It involves a bit of risk to focus on small-cap stocks that have rapid growth potential, but long-term success.
Blended investing also known as balanced investing. It is a combination of value investing and growth investing. This strategy has good asset allocation, where the investor can hit the best of the stock market.
