Sunday, 15 September 2019

How To Make Money In The Stock Market - 5 Steps

How To Make Money In The Stock Market - 5 Steps

When people talk about investing. Most of the time they are talking about stock market investing. Now, you are never guaranteed to make money when you invest in the stock market, so you want to make sure you do own research. But there are 5 tips you can use to help you profit from the stock market.

Oh, and I have to tell you, I am not a financial planner or an accountant, I am just a small-time blogger. So, with that, let's get started

1. It's Not Always About What You Buy That Matters. But When You Buy.

You can buy shares in the most profitable company in the world but if you buy in right before an economic crisis, well, the entire stock market will come down and that means your amazing stock will go down too. That means don't chase stocks, wait for the market to come down before you pull the trigger to buy it. 

How are you supposed to know when it's a good time to buy it.

  • Well, you will know how, when you are watching the news and everybody talking about how the stock market is soaring and how people are making tons of money in the stock market, so, you have to buy now. Yeah, that is exactly when you should not buy.

  • I know it's tempting to buy when the media is reporting about all these people making so much money in the stock market, but I need you to trust me on this one, the last thing you want to do is play catch-up when it comes to investing.

Stock Economic Cycles

Stock is like every other asset in that they follow economic cycles, there are times when the stock market is going to go up which is called the "Bullish Market" and there is time when the stock market is going to come down which is called the "Bearish Market" and then in the middle you are going to have a bunch of small little Corrections.

You have to be patient, what goes up must come down and that doesn't just apply to apples falling on people's head.

Here's a very simple way to put it. Buy a strong company when you notice the economy is weak.

2. Buy For The Long Term

Remember we are talking about stock market investing, not stock market trading. Buying a stock at 9:00am and then selling it at 2:00pm. That same day. That is not investing. 

Investing is when you buy a company and you have the mindset to hold it for at least a year. That is what investing is.

  • You want to buy a stock and then hold it so your company has time to grow and make you more money. Plus, you don't want to be tempted to sell your stock every time there is a down day in the market.

Remember, economic cycles happen, your stock might come down a little bit, stay calm. 

3. Investing In Chunk

I don't care how smart you are, nobody and I mean nobody can accurately predict what is going to happen in the stock market 100% of the time. We'll never be able to predict it if the stock market it's at the top or the bottom

So, instead of investing all the money at once, you should buy and sell in smaller chunks.

Here's what I mean

If you want to buy $12,000 worth of shares of a particular company, you can start off by buying $3,000 when the price hits to target buying price. Then if the stock price goes down, you can buy $2,000 more and then another $3,000, this way if the stock price goes down big. You can still buy more.

If you are unfamiliar with how to actually buy and sell the stock, you have to use a brokerage. There is a bunch of them out there.

4. Investing In Dividend Paying Stocks

If you don't want to wait until you sell your stock to cash in. You can also invest in dividend-paying stocks. Not every company in stock pays a dividend, that means you are going to have to do a little bit of research to see if your company or stock is going to pay you a dividend or not.

If these companies do pay you a dividend, that means they are going to pay you every single year just for only the stock. All you to do is buy shares of it and every year they are going to give you money.

Most companies pair quarterly dividend, meaning, to pay you every 3 months. An amount each company pay is going to vary from company to company.

5. When You Are Trying To Sell A Stock - Don't Get Greedy

Nobody can accurately predict when the stock has reached this peak, so, don't try to time the best time to sell a stock. Remember, green is green, if you make a profit, take it, don't look back after yourself and remember you can sell your stock in chunks too.

If you think the company might go higher, you can sell a portion of it today and then sell somewhat later if you think it's going to keep up.

Remember I am not telling you what to do, these are just some of my tips so make sure you do your own research. 

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