Stock tips for beginners

Once people discover that you have opened a stock market account they will be only too willing to provide you with stock tips. It is easy for them because they are not investing any money and they may have even less knowledge than you have. The stock market for beginners to trading is a minefield and requires a deal of study before parting with any money. A beginner, through excitement, will want to buy and sell much more frequently than a seasoned trader and all that the beginner will achieve is higher broker fees and higher taxes. There are many simulations of trading shares online and there is also stock market software available to allow you to try trading shares without any financial risk attached. Beginners to trading do make mistakes and to help to minimize them I apply the PEG principal to trading as follows:

P = panic E = eggs G = greed

Panic:

Do not be afraid. Do, of course, look before you leap into investing in shares. If you have spread your options wisely then a fall in one share price will be balanced by a rise in another. Better still, if you have started with only small trades and the stock market tumbles your losses will not be very large. Once you begin to feel comfortable with the whole concept of trading you will be able to relax more, take a few more risks and enjoy the experience. Panickers are known to buy and sell at the wrong time.

Eggs:

Having all your eggs in one basket is not a good maxim no matter how tempting the price, or how well recommended the shares seems to appear.

Greed:

Knowing when to sell is a skill you will acquire but if you wait too long by being greedy for bigger returns then disaster could strike. Make a reasonable gain rather than wait to make a killing (which might not materialize).

A few more words about the risks: Not wishing to frighten anyone away from the wonderful world of trading it should be noted that the stock market can be volatile. It can happen that the shares you paid good money for might become worthless overnight. The company might be liquidated and you may not get any money back or perhaps a paltry 10 cents on the dollar. However, with care, the risks associated with the stock market can be marginalized in the long run to produce a profit.

The best shares to buy

When you purchase a share or shares in a company you have also acquired a portion of that company’s stock. Depending on the type of share purchased you may be entitled to a dividend twice per annum. As a stockholder (if you have kept the shares) you will be entitled as an investor to vote at the AGM. Only buy shares of companies that you have researched or that are already known to you. Learn who to trust when it comes to stock tips and tread carefully through the stock exchanges of the world.