- 1). Get a low-cost stock broker or brokerage software. Focus on finding a broker with a good reputation and low fee structure. For more seasoned investors, self-investing online brokerage tools are a good option.
- 2). Diversify your portfolio no matter how little money you're investing. The hallmark sign of a poor investor is a lack of diversification. What does "diversify your portfolio" mean? Basically, make sure that you have your money invested in many different stocks and in many different sectors of the market.
- 3). Minimize risk within your portfolio. As tempting as it might be to invest on risky companies and small-cap stocks, or even micro-cap ones, you should stick with large, well-known brands. Big companies will perform well over time, even if their month-to-month numbers aren't astronomical.
- 4). Invest for the long haul. Only the foolhardy think that they can corner the market and become wealthy with short-term, high-risk investment strategies. Choose your stock holdings for staying power and long-term results, not the chance of short-term gain.
- 5). Remember, it's not a loss until you sell. Think of your stock, day-to-day, in terms of shares, not in terms of value. If you buy 100 shares of a stock at $1 per share, and the next day the price dips to 90 cents per share, the immediate instinct is to think that you've lost 10 percent of your money. This isn't the case. You don't actually lose money on an investment until you sell your shares. So, think in terms of long-term value (the number of shares you own), not in terms of daily fluctuations.
SHARE
