Are you new to the stock market? Are you still on the outside looking in? You likely have plenty of questions. There are countless stock market strategies out there, so which ones are the best for new investors? Here are a few to consider.
The IRA Route – if you have an IRA, either a Roth or a traditional one, you can use that account to invest in the stock market. By using an IRA, instead of a typical 401k plan, you often have a lot more choices in how to invest your money.
Invest Your Extra – getting into the stock market is a good idea for just about anyone. However, if you don’t have a surplus of income, then it might be better to wait. Investing only the money you won’t need for the next five years is a safe way to go.
Be Passive – that doesn’t mean you don’t take any risks. But it does mean you pool multiple stocks instead of betting on one single company stock. This creates a good balance because the strong stocks help offset the weaker ones. Over time the passive stock strategy historically offers much higher gains than aggressive strategies.
Limit Active Stock Trades – that being said, it’s ok to invest in individual company stocks. However, you should limit the amount you put into these kinds of stocks to 10 percent of your portfolio.
Stock trading always has risk, but using these tips can help reduce the risk, which is important for many new investors.