Tips for an Investing Newcomer and a Look at the Stock Market 2015-2016
Every investor is once a newbie and while there are those who thrived and become successful in the trading field, not everyone is lucky. For those who are interested in entering the stock market and trading in 2015, preparation is the key. The sad thing is that many newcomers enter this risky world uninformed, which after several losses, they will realize is a big mistake. If you are interested in becoming an investor, here are some words of wisdom for trading in the stock market at 2015 to 2016.
Consider yourself as new.
Even if you know a bit about previous market cycles and have a little background in the world of trade, you are new if you don’t have an actual experience. This means as a newbie, you still have plenty of things to learn. Take some time to prepare. Read all the resources that you can get and if possible, get a trading coach—someone who is considered to be an expert in his field.
Don’t be blinded by market highs.
If the highs get you excited and giddy to trade, take a moment to breathe. It is not always that way. Know that the economy is unpredictable and a momentary high can turn into a sudden low before you know it. Don’t be brainwashed into thinking that the economy will no longer be as bad as it was in 2009. Instead, think really hard if investing in stocks is really what you want. Remember, you can end up losing everything or consider another type of investment by buying gold bars.
Don’t base your decisions on initial luck.
If you have traded early this year and lucked it out big time, then good for you. However, it is important to know that luck is not permanent and only works in your favor once in a blue moon. Have a more realistic mindset and make decisions based on facts.
Understand market cycles.
Among the mistakes new traders make is thinking that their gains are mainly due to their skill in stock picking. This may not be the case. Market cycles are important determiners in the success of your trade. If you chanced upon a good market period, you chances of profit are very high. If you traded at a low season, your chances of losing are considerably high.
Have a keen eye for extremes.
There are two extremes that are actually red flags for a newcomer. One is the very low interest rates. The other is the 6-year straight trend of escalating prices. The combination of these two actually sends out a signal that 2015 is not the time to invest, especially if you have no experience under your belt.