Pick the Company, not the Price
Pick the Company, not the Stock In stocks, there is a clear, long history of a company's success, metrics, and growth. The foundations, like with cryptocurrency, will almost always guarantee long-term growth and payouts. You should not be choosing your investments based on dividend rates, or based on the metric. You should be supporting companies you want to support, because that's what you're doing when you invest. For instance, if you hate Apple and everything it stands for, don't invest in it, because you're basically saying Apple, let me finance what you do, keep doing it. You can't invest into something without showing support for it, and you shouldn't. This also applies to ETFs as well, start with strong names with good foundations.
Knowledge is Power
Start with what you know Don't make investing too hard at first. You do not need to do, or know everything. You don't need to diversify with your first investment, or even your third. Relax.
Invest in what you know. Do you know gaming and computer related technology? Invest in the stuff you're passionate about and into it.
This should be a natural part of investing. You don't want to have to keep up with something you don't care about, for instance, maybe you don't care about all of that medical tech mojo and you don't want to have to keep up with the newest technology coming from who, and who is partnering with who, because these types of things are boring to you in the medical field. Obviously you shouldn't invest in med-tech then.
Maybe you're big on crypto, and not really big on stocks and need a starting point. Invest in a BTC ETF, or check out different Blockchain technologies or stocks that are adopting crypto, such as RIOT, COIN, Paypal, Square, etc. etc. There is something that YOU are interested in SOMEWHERE on the market, go find it and focus your attention there initially. THEN expand outward to other things you know.
Slow & Steady Wins the Race
Take it Slow: For most investors, this is the best advice that I have for stocks. Day trading is not for micro investors, it's not for low capital investors, you do not want to leverage or use options generally speaking as a newcomer to stocks. You can learn these things AFTER you get a handle on stocks in general, how to research, how to invest, and building a balanced portfolio.
Investments in stocks are not like crypto. They are slow-paced, for long term investments, generally speaking. There are many who will disagree with me on that statement, but I only mean it in regards to newcomers and small capital investors. This is your slow and steady return. (While still outpacing inflation and effectively building wealth over time).
If you play crypto fast, you play stocks slow. (Comparatively). For instance, a long term hold in Crypto might be 2, maybe 5 years. A long term hold in stocks is a lifetime. In Crypto, day trading can come down to literal seconds. In stocks, you're going more on a day by day basis, or perhaps via after/pre-market.
Don't put all your eggs in one basket.
Diversify. This is more important within stocks than cryptocurrency, so it gets its own second spot here in the stocks top 5, just like Crypto got an additional repeat as well in DYOR. (Which again, is a general investing tip and should be used in ALL investment types)
Diversify your portfolio. By that, you want to have a variety of stocks that cover different industries, different commodities, or different types of investments. Invest some of your portfolio in ETFs, invest some in metals, or utilities for some stability, invest in bonds for almost guaranteed, low returns. Have some high growth stocks, have some dividend stocks. Invest in real estate, or previous metals, or the environment. Invest in Tech and Medicine, but then maybe invest in Financials.
You don't need to do them all. Don't worry about spreading out too far, just simply aiming to have slightly different investments, and especially ones that will perform better when others may not (for instance, crypto, tech stocks, metals, and financials)
I don't mean own 50+ stocks either. I just mean have a few distinctions that operate, thrive, and fail in different aspects of the market. You want one thing to do poorly and something else to be doing well, and offsetting that as much as possible. This will help stabilize your investments, so, in the case of an emergency where, apparently your emergency savings aren't enough, you can pull out of a specific investment safely without diminishing and taking losses on a poorly performing investment.
Moving fast is not the same as going somewhere.
Don't be (too) Fast. Your get rich quick schemes are not in the stock market unless you already are rich. You won't make thousands a day day trading unless you're pushing around 10s of thousands of dollars with absolutely no need for it. There is no secret trick to the stock market where you'll have millions tomorrow UNLESS you're putting hundreds of thousands in today. Do you have hundreds of thousands? No, probably not (Sorry for assuming if you do though :D) If you're not a big fish or a whale, don't throw punches like one. It's not a contest, and the contest is rigged way out of your favor from the beginning anyways. $1000 making a 20% return in the stock market is just as amazing as $100,000 making a 20% return. The difference is that one made $200 and the other made $20,000.
$200 is not worth the taxable events and headache caused by day trading. It's not. If you want faster returns and speed in general, consider investing in crypto, which is likely the fastest paced of investments.
There are many people who will prove me wrong here, but my point is that day trading is a skill, requiring knowledge, expertise, timing, preparation, etc. etc. and it's NOT something most people are adept at. Most people don't even beat somebody who just puts all their money into the S&P 500 ETFs. Some of you might, and will one day, but for now, as beginners, you should not be doing that.
The reason crypto is so profitable right now is because there is a huge wealth transfer happening as it is established, on top of celebrity and popular support, and this is driving crazy returns. These returns are likely not sustainable, but a good way to see it is that these products are still reaching their actual value/potential. Likewise, just the disapproval of China and Elon Musk now has those profits surging back downwards! Volatility in a nut shell. Crypto is like a game of Jenga, in that sense.
Much of the Stock Market on the otherhand is already stabilized, and has seen its growth to where it is, I imagine the two will fall more in line with each other as time goes on. That's not a weakness on the Stock Market's part, it's just a different type of strength: consistency.
Keep in mind I am not a professional, I am sharing advice that I've learned, that I've been told, and that I live by in my experiences in finances. Hopefully, they will help you too. I will not, however, tell you which stocks to invest in, or when to invest in them. I am not the type of person who you should be listening to for these types of things, so I won't be doing articles on these types of things, at least, not anytime soon.
I hope these little bits of advice help, as they are the core of many investors and serve as something to protect and encourage you to invest with what you know, and to take it slow and learn the game before diving face first into it.
If you'd like to see a more in-depth article, or have questions, be sure to leave them in the comments!
Want more specialized advice? Check out these articles coming soon:
5 Rules & Advice for Investing in Collectibles (Coming NEXT WEEK)
5 Rules & Advice for Investing in Precious Metals (Coming SOON)
I will also be writing articles on how to get into Stocks (eventually) so check back soon for those as well!