Hacks Every Beginner Investor Needs To Know

The stock market and investing is a risky venture, and it’s not for everyone. But sometimes you have to take some risk in order to make money, and despite the risks there are loads of benefits. If you’re a beginner investor and choose to take the risk you can earn a higher return than other savings options. But no one knows what the market will do.

There are ups and downs to the stock market, even in a single day, but that’s where you can make some money.

I will caveat this post by saying I too am a beginner investor, and I don’t have a financial background. So these hacks and tips are purely from my experience and may not work for everyone.

Know what you’re able to risk

While it may be unlikely and depends on what investing you do, you need to be prepared to lose all of your investments. So only invest as much as you can lose. Don’t risk everything you have saved (and split out anything you do invest).

You can go for lower risk investments where you’re less likely to lose money, but you won’t make as much.

Investors who know how much they can risk are less likely to panic when things go wrong, or get emotional in changes.

Beginner investor tips- diversify your investments

Don’t put all of your investment eggs in one basket. It may seem like a great idea to put all your money into one investment, but if it goes wrong you could lose everything. Doing this is called ‘over-concentration’ and isn’t a good tip for beginner investors.

This is why I like having FTSE100 shares as it covers all companies within the FTSE100. So if a few do really badly and drop it’s usually covered by a few others who have done well. They’re the only shares I’ve bought that have never gone down in value.

Me and Luke both have separate Stocks & Shares ISA’s. Mine is low risk and guarantees me back how much I’ve put in if I invest for a minimum of 10 years. Whereas Luke’s is higher risk. Having the mixture means we could lose the money in one, but not the other. With the individual shares I have they’re in a mixture of different companies and industries.

Do your research!

Before you buy any stocks or make any investment, do your research.

If you’re putting your money into a Stock & Shares ISA look into different companies and see what it is they invest in. If you’re buying specific shares through a platform like Freetrade (affiliate link) look at the how the stocks have performed, and see their financial information.

The better you research, the better your idea of its potential is.

Beginner investor tips- don’t get emotional

It can be really tempting to buy particular stocks in companies you love or have emotional connections to. But try and separate your feelings from being practical.

Don’t let emotions get the better of you and go for ones that are a better fit for your portfolio. Be patient and make your decisions based on research and facts.

Would you consider yourself a beginner investor?

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