Contrary to popular belief, the stock market is not exclusive to the rich. Investing in the stock market is one of the best ways for anyone to build wealth and become financially independent. Investing small amounts of money continuously will eventually lead to a snowball effect, as small amounts increase in size and gain momentum and eventually lead to steady growth in capital in order to achieve success. The right thing to do is to invest your money and the most important thing is to maintain your patience, discipline, and diligence
Be patient The first obstacle facing investors that prevents them from seeing the huge profits of the aforementioned multiplier investment is the lack of patience. Indeed, it is difficult to monitor the very slow profit movement and in some cases to bear the exposure to lose in the short term. But still, the most important component of a successful investment process in the stock market is patience.
Remind yourself that you are playing a long game. The lack or absence of big and immediate profits should not be considered a sign of failure. For example, if you buy a stock, you can expect to see it fluctuate between profit and loss, and in many cases, the stock will fall before it rises. Pretend that you are buying a piece of a real business. At times, you may feel frustrated that the value of the business has declined in the past week or month, you should not feel the same frustration if the value of your stock fluctuates. Companies’ profits must be measured over a large period of time in order to be able to measure their success or failure correctly. Accordingly, the stock’s movement will be affected in the long run.
Avoid focusing on a few stocks The concept and the idea of not putting all your eggs in the same basket is crucial in investing. In the beginning, your focus should be on diversifying and spreading your money over different stocks.
Buying one type of stock makes you exposed to the risk that this stock may decline and its value decrease dramatically, but if you buy many stocks in different industries, the risk of loss will undoubtedly decrease.
For example, if the price of oil drops and your oil stocks decrease by 20%, it is likely that the price of retail stocks will increase in value because customers tend to spend more money on goods as a result of the lower price of gas on them, while the prices of shares in a field such as information technology will remain fixed. Your portfolio will not be very heavily affected by the decline of oil stocks.
A good way to achieve diversification is to invest in securities that diversify for you. This may be through mutual funds or exchange-traded funds (ETF).
This was not written by Thndr and this is not investment advice, you should do your own research before making investment decisions.
