Stock Investing Tips For Beginners

By Cara Gerone

People who don't know much about the stock market often search for information online. They search for things like "stocks for beginners" because they feel overwhelmed before they even start. If you don't understand the stock market, the good thing is that you probably don't have any money in it and haven't lost anything in the last several years. Right now, all the people who have lost money in stocks are feeling a bit sick.

So the first thing you should learn from the recent market correction is that the money you invest may disappear. Many investors were ruined and lost too much because they had invested more than they could afford to lose. Some had greater losses because they had bought mainly into one particular stock or sector.

Your age should also play a factor in how much money you have in the market. As you can lose money in stocks, it is not a good idea to invest money you will need or might need soon. As we get older, our need for money for healthcare and other things becomes more imminent and you need money for retirement. Having most of your money in stocks at an older age puts yourself at risk if the market falls.

A good principle to remember is to always invest in a variety of stocks. This is known as stock diversification and it will help protect you if one stock falls in value. Buying stock in different industries is also a good idea, because it offers some protection in the event an entire industry fails. However, in a down market where almost all stocks and industries have fallen, as they have recently, even diversification may not help that much.

Compared to two years ago, the stock market is in a fairly bad place right now. People have lost their retirements and seed money, billions of dollars. Even though the market is heading in an upward direction right now, people lack the funds to put things back into the market and recover from what they lost. What's more, some people are just too afraid of the market going down again to risk the money they could make through the current rise in stocks. - 31970

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