5 Things First-Time Investors Should Know About Investing
You've finally decided to take the plunge and invest in the market.
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Diversify your investments.
It's tempting to put all your money in one investment, but diversification is an important principle in any portfolio you decide to build. Not sure which set of companies are right for you? Consider an investment in an index fund, such as the S&P 500. This allows an investor to have exposure to a wide variety of the largest stocks.
Actively follow your investments.
Have you invested in individual companies? If you have, you should follow the news as well as the quarterly and annual reports of these companies. These are all available online. You can also listen in on the earnings calls of these companies and hear how management teams respond to some of the hard-hitting questions asked by professional investors. You'll learn a lot in the process and it will help you hone your investment skills and help you in your future investment decisions.
Invest as consistently as you can.
Nobody really knows what will happen in the future. It's very hard to be successful by timing the markets. If you can set aside 10 percent regularly from your paycheck for investment, you'll be way ahead of most people, and that cushion will add up over time.