Stock Investing Tips

The prices of stocks never remain stable. They keep rising and falling. The investors make profits or losses due to the fluctuations in the prices of the stocks.
When you invest in a stock, you may feel distracted if the price of your stock starts going down. This can result in a panic situation in which you would want to sell the stock and buy another, more promising one. These kinds of feelings are very natural particularly if you are a new investor in stock trading.
Invest disposable money
If you are new to stock trading, you are likely to make mistakes and lose money. You must be sure that the money you invest is disposable or in other words, you must have some spare money which you can afford to lose. Or, at least you should be able to hold on through the tough times.
Quite possibly the fall in your stock, though seemingly prolonged, may yet be temporary. The stock may have strong fundamentals and may rise up once the existing market forces that have pulled it down go away.
Meanwhile, you get another promising investment opportunity. Can you afford to invest additional money while your existing investment lies locked for some time?
Learn while you earn
While these risk factors should be considered seriously, there are ways you can avoid such situations to a great extent. You can earn while you learn without suffering losses that may make you uncomfortable.
Start cautiously. Invest small and do not try to become rich overnight. The initial time in stock trading should be spent in studying the nuances and getting a feel of stock trading. You do not have to buy penny stocks simply because you cannot afford to invest in good and high value stocks.
There are stock brokers who can initiate you into stock trading with minimum risks. You can go for real time trades with negligible investment packages such as $3 or even $1.50. You can enter buy and sell orders, both market and limit orders and also set order expiration options.
If you can afford to invest, but are afraid to invest in high value equities due to a lack of experience, you may invest in ETFs as a fill gap arrangement till you acquire some mastery in investment in individual stocks.
ETFs or exchange traded funds are index traded funds. An ETF tracks the value of a stock index or the market as a whole. ETFs are traded like stocks. They represent a basket of securities that are traded on an exchange. Since ETFs are similar to stocks, they offer similar flexibility. They are liquid funds and can be bought and sold throughout the trading day and also allow intraday trading. ETFS provide a wide range of investment options. They can help investors build a diversified portfolio that is easy to track.
Traders have the ability to short or buy ETFs on margin. They have low annual expenses and are tax efficient due to SEC regulations. As a stock trader you are less exposed to risks associated with trading in single equities. You do not have to pay stamp duty. The annual management costs are low. You can enjoy flexibility in the timing of purchases and sales. ETFs are available online. You can check the price movement daily. Since the indexes constantly drop poor performers and pick up the good ones, a trader is always investing in the best performers that the market has to offer. Therefore, your index tracking ETF delivers returns in accordance with the general market trends.
Moreover, you have to pay minimal expenses on trading. It is, therefore, convenient and cheap to buy and sell the ETFs. Since they follow indexes like the NASDAQ 100 or the Standard and Poor 500 to track a bunch of different stocks, they are automatically diversified. The great benefit of buying ETFs is that you can actually buy hundreds of different stocks with every dollar you invest. You have to pay to your broker only a low cost investment plan fee that ranges from $1.50 a trade to $3 a trade.