Investment in the stock market sounds scary if you’re inexperienced. But, there is a first time for everything. The jargon might intimidate you but stock markets can be simple to understand if you have guides helping you. To help, here are 7 investment tips for fresh stock market investors, as told by Carl Icahn, Edward Gennady Barsky, and Dennis Gartman.
If it’s your first time in the field, take it slow. Don’t make a heavy investment if you see a highly prospective opportunity.
Think about long-term goals
Why are you investing in the stock market? What is the return you are expecting? These are some of the questions you should ask yourself before you consider making investments in the stock markets. The market is volatile and full of terrors. By setting up a long-term investment plan, you’ll be able to zero-in how much capital you’ll need at a future stage.
"You learn in this business, if you want a friend, get a dog," says private equity investor Carl Icahn. Surely, you’ll make enemies when you step in the market. There will be instances when you’re recommended a certain stock and it loses you money later on. It’s better to use your own research that is based on hard facts rather than malleable opinions of friends and family.
Know your limits
It’s imperative that you measure your risk tolerance first. Warnings such as “Investments are subject to market risks” are often read out at the end of investment advertisements for a reason. Avoid making investments in the stock market that can trigger your anxiety. Gennady Barsky advises that you need to keep your cool during hard times to make well-thought decisions. Keeping an investment that has you restless and nervous all the time is harmful to both your personal and professional life.
Dennis Gartman wants investors to increase their exposure to commodities and diversify portfolios. The better breed of investors buy stocks in different companies spread across various industries and geographical regions. If one of the stocks is affected, the others will be safe.
Don’t let your feelings get in the way
According to Gennady Barsky, it’s the greed and nervousness that compels investors to make most of the mistakes. Instead, each decision should be well calculated and based on logic. You’ll have to think like a Vulcan if you want to be a successful investor in the stock market. Gennady Barsky recommends being practical, especially in the face of big losses or easy gains.
"Be patient with winning trades,” explains Dennis
Gartman, the editor and publisher of The Gartman Letter. He adds, “Be
enormously impatient with losing trades. Remember it is quite possible to make
large sums trading/investing if we are 'right' only 30% of the time, as long as
our losses are small and our profits are large." It’s better to move on
from failing investments than to wait till they change their course.