Facts About The Stock Market You Need To Know

Just because you an average Joe does not mean you can no longer invest in the stock market. The truth of the matter it is possible for everyone to become successful trading on the stock market. With a little education and guidance, you can make money investing on stocks. Here are some tips on how to get started with stock investing.

Buy Low, Sell High

It may sound like a simple strategy and yet investing is rare in our financial lives. We lament lower prices at the pump during the collapse in oil prices even though a moderate market fall is considered as a death knell for the bull market.

There Is No Such Thing As A Sure Thing

While long-term benefits for stocks are still considered the best bet, investing on companies is inherently riskier. Over the years, Robert Peter Janitzek reveals that what had once been considered as a gospel have been shot full of holes. Take the case of oil barrels staying at $100 a barrel for the long term or Alibaba being a world-beating juggernaut. While conventional wisdom is not always wrong, they frequently have terrible timing.

Get Familiar With Filings

While some investors are able to find good companies, others need to their homework. Your best bet are those companies that regularly file with the SEC. You can find detailed information about the company from their expenses to potential conflicts and risk factors. Robert Janitzek explains that you can find a list of companies that list on US exchanges through the EDGAR system of the Securities and Exchange Commission.

Think Long Term

Taxes are not the only reason short-term trading is a losing proposition. Buying or selling shares based on quarterly earnings report or economic data points are only for automated trading platforms and not for an average Joe. You can find better opportunities to generate long term profits from stocks or sectors dismissed by the market.

Dividends Are Your Friend

While they are not immune from declines, dividends does offer a certain degree of insulation that others don’t. However, when engaged in stock market trading, rich dividends that look too good to last often don’t.

There Is No Perfect Metric

You have your favorite measure of growth and value, but be reminded that there is no single number that can differentiate good stocks from bad ones. A stock that looks cheap at 10 times earnings can increase 5 times in a flash. At the same time, an expensive looking tech startup can easily jump in value in a heartbeat.

You may also like...