Don’t Invest a Dollar in 2020 Until You Read This
Dear Penny Stock Millionaire,
2020 is almost here, and it’s my goal to make sure you are equipped with all the knowledge that you’ll need to be a successful trader in the new year. Over the past two days, I covered the terms that you’ll need to know to be a stock trader, and the foundational steps that you should take before you begin investing.
Today, I’m going to give you 5 tips on how to invest in stocks the right way. Any schmuck can put money in a brokerage account and pick stocks at random and hope they go up. I want to give you the tools that you need to be an investor not a gambler.
These are some important tips to consider before you get started with trading.
1. Cut Losses Quickly
If you read my posts and follow along with the content that I publish, then you probably already know that my #1 lesson in trading is cut losses quickly. This is true for any style of investing though… and in life in general!
If it’s not serving you… cut it off. If an investment goes sour, whether it’s a trade, a real estate deal, or whatever, have the discipline to cut losses — FAST.
Yes, it can hurt. But what can hurt a whole lot more is holding and hoping. Don’t hang on to an investment hoping for a turnaround only to watch it dwindle in value. Hold and hope is not a strategy!
That’s why I urge my students to start small. Trading small at first to minimize losses is a strategy.
If you put all of your account into one type of security, it’s the equivalent of going out to sea with a boat with no life rafts. If the boat goes down, everything will be sunk. Diversifying your investments will help keep you safe in a high risk world.
Diversification means spreading out your account across a variety of investment vehicles. This could mean choosing stocks from different price points or sectors. It could even mean investing some of your income in stocks and some in real estate.
Most successful people don’t rely on just one stream of income. Don’t put all your eggs in one basket.
3. Choose Your Broker Wisely
You probably wouldn’t even buy a new toothbrush online without checking the reviews. So don’t get lazy with picking just any broker.
Some brokers can tempt you with low rates and promises too good to be true. But always dig deeper, or you end up paying in other ways. Some brokers are shady, so do your research.
Your broker is responsible for your money and executing trades for you. Choose a good one with a fee structure or minimums that work with your account needs.
4. Learn the Rules
If you were going scuba diving for the first time, you’d take a lesson or two to learn how to breathe underwater before jumping in.
As a trader, it’s important to get your bearings before diving into the financial markets. That means focusing on investing in your education before investing your actual cash.
That is why I write these articles! I want to teach you how to fish, not just give you a hot stock tip and send you on your way. If you are interested in trading low-priced stocks, I encourage you to stick around and soak up everything that I can teach you.
5. Find an Investing Style That Works With Your Budget
You don’t need a ton of money to start investing. However, the investment types available to you may be limited depending on your budget.
Personally, I find that with a small account, trading low-priced stocks is the most effective method of getting a return. Since the stocks are low priced, it’s accessible to even small accounts.
But not everyone wants to trade like I do. That’s ok! There are tons of successful traders out there that use different methods and strategies than the ones that I utilize.
I found the strategy that I like and it has worked for me for 20+ years. I have followers who have been using the methods that I teach and made tons of money with it. So I know what I teach works. So I encourage you to try out what I teach, but if you find it doesn’t work for you, that’s ok too!
The Final Word on How to Invest in Stocks
To sum up the lessons that I hope you learned in the last 3 days, there’s more than one way to invest in stocks. Your personal constitution, account size, and level of interest will play a big role in deciding what approach is right for you.
I’ve chosen to trade low-priced stocks, but that’s only one option. Depending on your personal goals and style, there are any number of styles of trading or investing that might be better suited to you.
There’s no right or wrong decision — it’s all about your specific goals and what will get you there most effectively.
But no matter what style of investing you choose, education is key.
Editor, Penny Stock Millionaires