Most of you guys are not financial experts and just want to invest for diversification purpose and the fun of it! So here are few guidelines…
Buy something you know. Think of it as a facial cream, you wouldn’t take the risk to buy it from an unknown brand! Too risky and too much to lose… even if it may be cheaper.
Learn some stock basics:
– P/E ratio: The best indicator of how expensive a stock is.
– Revenue growth: It illustrates sales increases and decreases over time and is a good measure about how fast a business is expanding.
– Dividend yield: Is a sign of the stability of a company and often supports a firm’s share price.
Know that if the stock had a good past performance, it does NOT guarantee future performance!
Invest in mid and large cap and avoid small caps which are too volatile. Don’t think you can outsmart the market.
Stay away from Biotech stocks awaiting FDA approval or that are in phase 2 or 3 of getting FDA approved. It’s true that the upside is super exciting but it’s exactly like checking into the casino and betting all in!
Focus on companies that pay good dividends. As a rule, just make sure that a majority of your portfolio’s companies pay out a quarterly dividend. At least you will have an income while holding the stock.
Buy established companies as cheap as possible. Don’t we all love to buy a brand bag when it’s on sale? On Wall Street it’s similar: A correction is like a sale on large caps and well-known stocks! So rush in and BUY quality merchandise when it is marked down!
You can always direct message me for some tips or questions… I’ll answer as soon as I can!