If there was ever a good time to start investing in the stock market, now it would be it. Getting a stock at a discounted value means better gains through appreciation when the market recovers. It is the best kind of investment opportunity that big bankers look out for. If you want to start an investment account and manage your stock purchases, you should be aware of a few things.
* Decide on your approach
You do not have to be super analytical about your investment and dive deep into each stock. Before buying a stock, you need to allocate a couple of hours per day to do some research. Look at their past management decisions, business growth, future expansion plans, revenue, expenses, business model, competition, and other aspects that may be of significance for that company.
If you do not plan to do any day-trading, do not stress about having to do constant research. If you found a good company, you will only have to do the main research once then just follow the news now and then. You need to decide your schedule to research a particular stock you are interested in.
* Different ways of investing
Equipped with your research notes, you need to decide how you want to invest. They are multiple investment strategies but what matters the most is to pick one and stick with it. You choose to be a value investor, growth investor, or dividend investor. All strategies are fine but they are not for everyone. Think about what fits you best and stick with it.
* Asset allocation
Do not fall into the trap of investing in a stock a significant chunk of your capital just because you consider it a good investment. You need to properly balance your portfolio, work on your diversification, and avoid having one stock representing more than 20% of your total assets. You will need to do a bit of balancing every time you make a new purchase.
