“I really didn’t believe that I could turn my life savings ($1,500) into a net worth of over $1 million simply by investing in stocks.” Those are the words of investing Phenom, Tim Grittani, a young investor who managed to navigate the treacherous waters of investing and day trading. The exploits of Grittani are not uncommon, but the road to that level of success doesn’t come without warning. Here, then, are 5 things that beginner investors need to do in order to join the ranks of success stories like Grittani.
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5 Things Beginner Investors Need To Do – Adopt The Right Mindset
Perhaps the biggest predictor of success in investing and day trading is the type of mindset that the beginner investors has. Timid and weak-minded people don’t make very good investors. Having a strong constitution and a stomach for risk is therefore important. But having a strong mindset goes beyond just constitution, it involves outlook. Typically, a successful investor starts out with goals and an investing ambition. Do you want to be a high flyer that fizzles after a short run; or do you want to be a steady developer that creates a long-term in vesting future? Having the right mindset will help in achieving this. So, the very first thing a beginner investor needs to do is develop a sound mindset.
5 Things Beginner Investors Need To Do – Have A Solid Income Strategy
How much money should a beginner investor put into stocks? The answer is of course, it depends; but there are certain broad guidelines that can be followed. Since investing and day trading carries an element of risk, it is wise to NOT go all in, at least not at the start when climbing the learning curve. Unlike Tim Grittani mentioned above, the beginner investor will be better served investing a manageable percentage of his money. And by manageable it is here meant an amount that if lost, won’t shake the core of one’s finances.
5 Things Beginner Investors Need To Do – Have A Solid Investment Strategy
Beginner investors have a wide array of approaches to take when entering a market. Options available include Index Funds, multiple stocks sold under an umbrella called ETFs; individual stocks, such as those offered by a company like Apple Inc. (AAPL); and penny stocks, high volatility stocks that typically trade below $1. Each has its advantages and disadvantages; and each will be attractive depending on the temperament and income profile of the beginner. On the whole, though, penny stocks are the most accessible due to their low pricing. In explaining in success to the media, Tim Grittani elaborated on penny stocks to buy.
5 Things Beginner Investors Need To Do – Know How To Deal With Setbacks
At some point or another, a beginner investor will experience a downturn; or if they are heavily trading penny stocks, a trade or two will go bad. Knowing how to handle these setbacks is very important, not least because failing to do so might eat into the strategy set out at the start. A bad trade, reacted to in a negative way, could for example lead to too structural a shift in the amount of money put into trades overall. This happens more often than beginner investors realize. Bobby invests $100 into a stock, gets wiped out, and then decides to throw $500 into another stock in a bid to recover losses. The prudent thing for Bobby is to stick to his strategy and hopefully play the game for the recovery using money he can afford to invest. It is also important for beginners to stay true to their winning mindsets. Just because a trade goes bad doesn’t mean the mindset has to change. The mindset, after all, could have nothing whatsoever to do with the trade going bad.
5 Things Beginner Investors Need To Do – Don’t Isolate Knowledge Growth
If a beginner investor sticks with trading and investing for say 10 years without outside help, they will learn something. But they won’t learn as much, or as fast, as they can by tapping outside help. In this instance, outside helps comes in two forms, mostly. The first is learning through books. Most of the top investing books can be had for less than $10 on Amazon, including some of the classics like One Up on Wall Street by Peter Lynch. The second source of knowledge and advice is the tried and trusted newsletter. For most beginner investors there are literally hundreds of top newsletters to choose from so getting on a list should be top priority.
Getting to a $1 million portfolio trading penny stocks isn’t easy for sure. But following sound principles will always increase the odds for a beginner investor. The 5 things outlined above are good starting points for any beginner. Beginners should use them well.
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