Beginner Investing Stock Market Rules

Beginner Investing Market Stock Rules

1. There are no guarantees. Despite what late night guru's might try to tell you, there are no guarantees. Investing is risky and uncertain. That is why it is rewarded.
2. Investing is not the same as saving! When you set aside emergency funds or savings accounts that is one portion of your financial planning. Budgeting is another. Investing is yet another. Combined, they each comprise important parts of your total financial strategy but never make the mistake of putting all of your additional discretionary income toward investing. Again - investing is not the same as saving.
3. Past performance doesn't forecast the future. There is a reason a similar disclaimer is included in almost every bit of investment advice: it's true! Unfortunately, people don't believe it. While history can provide a great deal of insight into the probability of certain events, it cannot forecast future events.
4. Diversify, Diversify, Diversify.
5. Fundamentals never go out of style. Learn everything you can about how the stock market works and stock market investing basics. Understand the industry. Read the business section. Listen to economic data and actually read industry reports. Gather all the information possible and then use it to make your own decisions.
6. Don't be afraid to be a contrarian. There are times when the masses are wrong. Fortunes can be made by understanding when to roll with the crowd and when to go it alone.
7. Establish a Free Online Paper Trading account at Wall Street Survivor to test your assumptions before trying it out in real life.