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4 Stock Tips You Need Before You Invest



By Business Desk




Friday, June 5, 2020.


Almost every investor knows about diversifying their portfolios - it’s the first thing that they learn about when choosing to put their money somewhere it can grow. The thing is, you need to make sure that you are aware of current trends and the changing economy before you get involved with the stock market. At the moment, you will be aware that Coronavirus is crashing the economy all over the world, and this is the sort of thing you have to be aware of when you are choosing to invest your money.


If you are investing on behalf of a business, you need to be on the LEI Register, and it’s important that this is something you research when identifying the long and short financial goals of your business. Stocks give you a chance to share in businesses around the world, and their successes too. It all comes down to being informed and conducting due diligence! Let’s take a look at four tips you need to apply to your plan before you invest:


Turned-on Monitor Displaying Frequency Graph

Image Source: Pexels


  1. Choose Indexes

It’s important that when you invest, you invest in stock indexes and not just stocks. These are imaginary portfolios and they represent portions of a market. They use averages that are weighted to measure the health of a market, and here is where you want to invest. Choosing individual stocks is far too hard, so investing in a whole index offers you a better rate of return.


  1. Use Dollar-Cost

If you speak to any financial advisor, they will tell you not to time the market. They’ll instead tell you to research your investments closely and look at the dollar-cost average. This will mean you are investing a fixed amount of cash on a schedule, regardless of the stock or fund. You’re buying when it’s cheap, so the price per share will go down.


  1. Think About Dividend Investment

There are companies out there that distribute some of their income to their investors directly. These are payouts that will be determined by the board of directors and they come in both cash and stock payments. It’s not common for all companies to offer dividends, so it shouldn't be expected, and you should definitely not rely on smaller companies offering them! Shareholders can have the option of reinvesting their dividends to treat the payments as a stream of income. The bigger companies offer their shareholders dividends to keep them happy with their income, and these are a good way of having security as an investor.


  1. Check Your Portfolio Every Year

You need to check your portfolio each year, and you can achieve a lot with just one index fund and an automatic dollar-cost contribution schedule. It might be nice to set it up and let it run but it’s not what you should do. You need to keep an eye on it for all changes and you can rely better on a successful portfolio this way. The more you watch your portfolio, the better off you will be!


4 Stock Tips You Need Before You Invest

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