Investing is stock is very volatile although not as volatile as the cryptocurrency market. It is the most accessible market to the general public provided you have the financial power which can be as low as $1 and a phone. There are several online brokers who handles the buying of stocks for people unlike the days where you have to look for a stockbroker in Wall Street or Silicon Valley. Just because it is easy to access the stock market doesn’t mean it is very easy to invest and get your money back, you can lose part or all of your investment (this has now become a motto for every broker).
There are a few things you need to understand about the stock market and about investing in them, and they are;
Never follow the hype
Analyst make money from making people buy or sell their stocks, in fact before an analyst talk about a stock, it must have been doing well for some time. One mistake people make is jump at a stock due to hype and since they have little change in their broking account, and do not want to miss out of the free money a rise will price will give, they start to buy and pump the price more. They do not bother to make research about the stocks or the company, but instead they just follow the hype. The interesting thing is, real investors know that an increase in a stock market due to analyst price will always end with a dump so they just pull out their funds and in few weeks or month, the stocks go down by 45% and people who invested due to the hype by the analyst start to lose money.
The one thing that is surprising is that the analyst always has a technical answer to why the stocks dropped. Look here, the media is in the business of selling their products, hyping stocks and products, hyping companies that pays them (Is that not how they make money?), they are not in the business of giving financial advice. By the time a media house come to talk about a stock as the new big thing, you already missed out of the stock, they just needed a hype so real investors can cash out big.
Buy Stocks Cheap from a good Company
The trick behind the stock market for traders is buy stocks cheap and sell them when they are high but even when buying a cheap stocks, you need to check out the company’s business foundation. If the foundation is shaky, then there is a problem as you might just lose your money. For instance, a company like Coca-Cola is selling its stocks at a low price and a new cola drink is also selling at a low price, people I’ll prefer to buy from Coca-Cola because it existed for long period of time, it has deals with restaurants, malls, cinemas and so on, so it is very difficult for the other company to over shadow them very fast.
Do not let your broker make you broke
The work of a broker is to make money for themselves while allowing you to invest in the stocks. Your duty is to make sure that you use a broker that is legit and at the same time will not charge excessive fee for deposit, withdrawal and trading. Why should you charge me for keeping my money with you, it is my money and not yours. Do not let a broker rip you off your money at any time, be always cautious of the percentage the broker is charging for everything.