1. Start with safer stocks.
Buy stocks that tend to be less volatile (meaning more stable with less up and downs in price). Consider consumer staples stocks that people still need products like food, clothing, and medical supplies even in tough economic times. This may be your safest strategy while you’re getting your feet wet.
2. Don’t fall for “hot” stocks.
What’s great for you neighbor may not be good for you. Even if the stock is hot, the company may have reached a peak and is coming down in price. Sellers may want to lock in their profits. You may be entering just as others are unloading. Malo. These companies may have lost much of their ability to produce big returns. It may be better to concede that you’ve missed out potential gains than rush into a hot tip that you have not researched well.
3. Consider starting with Exchange-Traded Funds (ETF).
It may be tough to select stocks with good value and growth potential so consider Exchange Traded Funds (ETF). These funds buy a bunch of stocks for a pool of people who may not have time or knowledge to pick individual stocks. It’s ideal for students, good for young families raising kids, and great for investors in need of diversification.
4. Find the right broker at the right price.
Your choice of broker directly influences fees, types of investments, research that you’ll have access to, and eventual returns. Some brokers make investing for beginners easier to understand. Some don’t. Consider discount brokers and mutual funds or exchange traded funds with low or no commissions.
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Victor Santos Sy graduated Cum Laude from UE with a BBA and from Indiana State University with an MBA. Vic worked with SyCip, Gorres, Velayo (SGV – Andersen Consulting) and Ernst & Young before establishing Sy Accountancy Corporation in Pasadena, California.
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He has 50 years of experience in defending taxpayers audited by the IRS, FTB, EDD, BOE and other governmental agencies. He is publishing a book on his expertise – “HOW TO AVOID OR SURVIVE IRS AUDITS.” Our readers may inquire about the book or email tax questions at [email protected].
