Ibbroker.canovel.org – Today is the day we develop the basic skills to expand your portfolio. If you have read our articles or watched videos about “Everyone’s First Stocks Should Buy”, you should at least own an ETF.
ETFs are the perfect first stocks for everyone, but when you build your skills, you’re ready to expand your portfolio, which is why today we’re talking about investing in stocks for beginners. As you’ve improved your investing skills with this series on the basics on Survivor Wall Street, you’ll have a strategy for building a winning portfolio!
In this article, we’ll start by sharing tips and tricks, as well as using the best resources to build your portfolio.
Why do you need an investment strategy
I know I know your first thought is Why do I need a strategy?
You might think you know the good and bad companies that rely solely on the Wealth 500…but there’s a lot more to the stock market than that. There are thousands of different companies that you can invest in and you want to choose the right company at the right time.
For example, you don’t want to end up like Craig, our friend mentioned in previous articles and videos. I think we can all say Craig should follow these investing fundamentals to improve skills and strategies. The famous big-volume Luckin’ Coffee stock has consumed it.
Without implementing a strategy or doing proper research, Craig invested in Luckin Coffee when the security was trading at $40 a share. One month later, Luckin’s Coffee is trading at $4 a share… This is a loss for Craig’s portfolio because he is not using a consistent investment strategy.
Try your strategy
Now let’s review the important steps of stock trading for beginners, to choose the right stock.
Step 1. Check your current financial situation, how much you can invest up front, and how much to invest on a recursive basis. As you begin to invest, it is important to form a realistic and operable strategy. You don’t need much to invest, but it is important to do only what you can afford.
Maybe you start with an initial investment of $500 or even $200 and decide to invest $100 or $50 a month frequently. This is how we mentioned in the previous video or the average cost is a dollar.
We’ll have an entire video and article dedicated to the average dollar cost if you haven’t checked it out!
Step 2. Set your investment goals. Why use this wallet? retirement or leave, etc. Setting a time frame helps you understand your decisions when investing. Do you have time to discuss the downside or do you need to invest your money in less volatile securities?
Step 3. Choose an appropriate and effective strategy for you. Today I’m going to share three stock picks, and the third is a secret resource that will help maximize your portfolio returns.
Strategy #1: The value of investing
Warren Buffett’s approach invests in company value. Warren Buffett explained that because you invest in a company, not a stock.
Often people don’t imagine themselves as business owners when they own stock, according to Warren Buffett, which is important when investing.
Choose a business (stock) that has a business model and an industry that you understand first and foremost. Then choose a company (stock) based on the big picture or the long-term. What does the value of this company look like in 5 years?
So your goal here is to find companies that are trading undervalued if you want to buy stocks or companies that are trading for more than they are worth if you want to execute.
People like Warren Buffett discovered that the market would overreact to good or bad news; As long as you do your homework, and focus on companies that will succeed throughout the day. Today’s news emerges from those companies. Their approach to investing can be beneficial to you.
To understand why this company is valuable in the long run, strategic investment funds have been proven to help Warren Buffett and many others find success, and they can work for you too.
Strategy No. 2: Investment Growth
Strategy #2 is known as growth investing. Invest in companies that have high growth opportunities. When we examine investment growth, let’s use two lawn mower business models.
Sue sets up the Roomba for garden care and John is your traditional gardener. Currently, Sue only has 5 customers when she tests her new product (outer room). On the other hand, John has 20 clients. This means that John brings 4 times the income.
In the short term, John’s company looks better, but in the long run, Sue’s competitive advantage allows it to get lower costs and higher capacity from clients it can manage.
So in 1-2 years when Sue takes control of Roomba outside of her business, she’ll be worth more than John. This is the basic idea of the growth approach. Choose the company with the greatest potential. Companies that have new intellectual property or technologies to change their competitive perspective, these are growth companies that you want to look out for when using an investment strategy for growth.
If you are wondering how to invest in stocks for beginners with little money, growth investing might be a great option for you.
Putting whatever money you have (and you’re comfortable investing!) into a portfolio of partial stocks or growth ETFs can be a great way to make some profits!