Tip # 1 - Never Go All In
Time is an investor’s greatest superpower. The most successful traders buy stocks gradually over time because it helps them increase their holdings with gradual share price appreciation as well as additional dividends—over years or even decades.
Here are a few tips to do just that:
Dollar Cost Average: Dollar-cost averaging is a method of buying stocks that has been used for decades. It means investing a set amount at regular intervals, such as once per week or month. This strategy buys more shares when the stock price goes down and fewer shares when it rises but overall evens out your average cost on any given trade which can make this technique really beneficial in turbulent markets where you don't know what will happen next! Some online brokerage firms let investors create an automated investing schedule so they never miss another investment opportunity again.
Tip # 2 - Don't Trade
Look, if you're going to trade then trade. If you're buying with a long-term time horizon then you need to avoid jumping in and out of your positions.
It is hard to resist the temptation as you watch your stocks’ values fluctuate. Checking in on them once per quarter will be enough. Anything more often than that can lead one overreacting and focusing too much attention on short-term events instead of company value or feeling like they need do something when nothing needs action taken just yet.
Keep ontop of news events affecting your stocks, but don't over analyze things.
Tip #3 - Don't Risk Too Much On Any One Trade
In general, I find 3 - 10 stocks is the best number to hold at any time for long term investing.
That doesn't mean you should buy one stock and hope it works out well. It means you should own a variety of investments, across different sectors and industries as well as across companies big and small.
The idea is that if you don’t know what will happen next, having more than one stock in your portfolio gives you some protection against something happening to any individual company or industry.
You want to spread your risk around so if one thing goes pear-shaped—it doesn’t take down your whole investment ship with it! If choosing stocks were like reading books, you'd want to avoid books like 50 shades of grey
Don’t go all in on just 1 stock because no matter how good the business seems to be in the moment.
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