How to Join the Stock Market

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Investments could make the difference between having an average income and late retirement, and having an early retirement and an excellent income. When it comes to investing, the earlier the better. Holding shares in growing companies can be a profitable way to get started in the world of investments because while they can have bad years, statistically they grow an average of 10 percent per year. It certainly would be a challenge to find a high-yield savings account reaching that percentage.

  • Determine how much you're willing to invest. Find a balance between what you might be willing to lose and how much you would potentially like to make. Consider that with diversification and the 10 percent average growth per year, in the long run you'll come out ahead.

  • Educate yourself on the market to decide on companies to invest in. It's better to stay in the stock market for a long term rather than simply for short-term profits. Pick large, stable, growing companies to start. Keep an eye on the big picture and look at the long-term growth patterns of these companies. Consider investing in big companies in several sectors. The more diversification in a portfolio, the safer it is.

  • Find a broker that fits your needs. This can be either an investment broker, which helps you make decisions, or a discount broker, which offers no advice but has a less expensive price. Ensure that the amount you have to invest meets the minimum required by the broker.

  • Keep an eye on your investments. Be smart about them, however. Don't simply be a trader; be an investor. While in the short run stock numbers can go down, in the long run they most likely will grow.

Tips & Warnings

  • Try your hand at a stock market game online first if you'd like to get your feet wet without actual risk.
  • Never invest more than you're willing to lose. It's important to consider the possibility of failure, especially when you start out.

References

  • Photo Credit dollars image by peter Hires Images from Fotolia.com
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