Best Strategies to Invest in Stocks for Beginners| Investment Strategies for US Stock Market

Are you willing to invest in Stocks and want to know about the best strategies to invest in stocks for beginners? You are at the right place!

In this article we are gonna talk about the investment strategies for US stock market

What is meant by an Investment Strategy

An investment strategy is a way of planning things like what kind of stocks would you like to buy? Would you prefer to buy high risk stocks or low risk stocks like meta stocks and alphabet/google stocks. Are you willing to invest for long term like 10-20 years or you are in a rush? How much percentage of your wealth are you willing to invest? These are some of the questions, whose answers you give to yourself while investing. These are called investment strategies.

In this article we will be discussing the best strategies that beginners can adopt to make sure that they don’t loose their hard earned money. We will teach you how you can take calculated risk.

You must remember one thing before investing in stock market that its not exactly predictable. You can make better and better decisions in stock market but you can never make a perfect decision while investing in stock market

Investment Strategies in Stock Market

Following are some of the best investment strategies that beginners can adopt while investing in stock market

1. Diversify your Investments

One of the best things that you can do while investing in stock market is to diversify your portfolio.

You should never rely on a single stock especially if you are investing in a long run. You might consider some company very great but there are alot of examples of companies that no one thought would end like they did.

So the best thing is to diversify your investments. This means that you should buy multiple stocks i.e of different companies. In this case even if some of those companies sink, you will always have some other options that might help you recover that loss too.

Usually it is considered good to have around 10-15 stocks in your portfolio. This could be the mix of high risk and low risk stocks

In short, “Don’t put all of your eggs in one basket”

2. Go for LONG-TERM

There is a popular term in stock market, “Buy and Hold!” This means that whenever you are investing in stock market you should make your mind for long term.

Usually a mistake that alot of beginner investors do is that they rush! They are in an unknown hurry. They just want to put money from one side and withdraw it from the other with a good percentage. It would not work like this in stock market.

If you want a quick game you should better go for trading. Trading is a thing in which you can make huge percentage of profits in few hours and even in few minutes. But stock market is not about that

Good investors usually look to invest in long-term for maybe like 5-10 years or even more like 15-20 years

3. Set your Goals

Before you actually start investing, its very important to define your goals. How much percentage you want to make per year on your investment? How much risk can you take? What would be the right time for you to sell your stocks? Like after how much profit would you sell your stocks and alot of things like that which define your goals

Once you define your goals it would be very easy for you to buy and sell different stocks at the right time

Also Read: Best Ways to Make Money using ChatGPT

4. Don’t Rush-Be Patient

Beginner Investors are usually emotional. They are always in a hurry. A sudden change in the graph make them sell their valuable stock. This is called wrong decision at the wrong time.

Investing in stock market is the game of your nerves. You need to be patient in conditions when your stock is not performing well. Don’t sell if its in loss. If you are confident enough that it will come further down in future then you should definitely sell it but usually, its not the case. Its better to wait for it to go up than to sell it because its down.

5. Wait for “The Right Time” / Buy the Dip

In stock market “The Right Time” is very important-the right time to buy and the right time to sell stocks.

What beginners usually do is that they buy stocks when their graph is high considering that its value is high and it would further go up in the coming days. But usually its not the case. If a stock is at a higher value than its normal value, chances are that it would go down in the coming time

And same in the case of selling. Beginners usually sell stocks when its lower than its normal or average value. They think that as the value of a particular stock is already very down so they should sell it immediately to prevent a bigger loss. But the experts do the reverse

Stock Market Experts buy stocks which are very credible and have a good brand name but their value is currently down due to some temporary reason. Stock market experts wait for recessions to buy stocks!

For Example: Coca Cola is a very big brand name in the world of soft drinks. Its a strong brand with probably a good future. If the value of Coca Cola stock gets down suddenly due to some particular event, what would you do?

In this case a beginner would sell his Coca Cola stocks considering that its value would go further down so he should sell it to prevent from a bigger loss. BUT an Expert would buy as many stocks as he could because he knows that its a temporary change and its value would again become stable and if he buy it in dip he could make good profit when its value would again become stable

So if a big company’s stock gets a Dip, you should but it

Also read about: Best Investment Apps

6. Dividend Investing

Most people usually consider dividend investing a better option. Its because in dividend investing not only the value of your stock grows but you also get a specific percentage of money on your total investment.

For Example, if you have invested $100,000 in a company that pays 4% dividends then you will get $4000/year in dividends and the value of your stocks also increase over time.

In this situation you can also re-invest the amount that you get as dividend and can grow your assets exponentially.

Coca Cola is one of the most popular companies that pay dividends.

Also read: Rivian Stock Price Prediction 2024, 2025, 2030, 2040, 2050

Conclusion

In short, investing in stock market is a risky game and you should only go for it with proper planning and expertise.

You should also observe different stocks over time and for practice you also also start investing through a demo account. By using a demo account you can know about your weaknesses and can improve them.

If you have any queries or confusions you can comment down below. Finanzerr would love to help you!

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