Thanks to the rise of apps touting instant stock trading catering to a younger demographic, more amateur investors are diving into the stock market than ever before – and they’re making rookie mistakes along the way.
As someone who jumped into the world of amateur investing in 2021 and quickly looked at an account in the red due to questionable day-trading decisions, mistakes were made.
Here are the best tips from a first-time investor who lost money and learned some valuable lessons along the way.
Create a Plan and Stick to It
According to Alexander Koury of Values Quest, the most important question to ask yourself as a first-time investor is ‘Why am I investing, and what do I want to achieve?'
If you believe in a company (and, in turn, its stock) enough to invest and potentially make money, that’s one thing. Having the discipline and patience to see it through until you reach your financial goal is entirely different.
Don’t Overreact to Normal Volatility
The stock market is volatile by design, with individual stocks frequently flipping from positive to negative and back again throughout a day’s trading session.
Don’t Let FOMO Get to You
Of course, nobody wants to pass up on a stock or investment opportunity that could make you rich, but don’t let the fear of missing out control you.
Delete the App. It Can Be Addicting
With money involved, it’s only human nature to want to track your investment just as often as you would refresh your Twitter feed or check Facebook. But, take it from somebody who knows: it only leads to stress and addiction.