You want to invest in stocks but are they really safe or even an option for you?
Here is what you need to know before you start investing in stocks.
#1 Stocks can be brutal
Buying stocks is fundamentally risky and not safe.
The price of a stock varies constantly, every day, every hour, every second.
You might know the price of a stock when you buy it, but not when you sell it.
And that’s the risky part.
#2 Do not buy only 1 stock
Putting all your money into one stock is fundamentally wrong.
You will have approximately a 80% chance of losing your money if you do.
You will invest too late or too early and pay the wrong price.
#3 With 6,000+ stocks, there are 6,000+ ways to lose money
Finding a good stock is time consuming and research intensive.
There are thousands of stocks available, but finding the right one, aka stock picking, can be very challenging, for beginners or professionals alike.
#4 Buy group of stocks
Professional investors will buy groups of stocks, it increases their chance of finding and buying a lot of good stocks at the right price.
But how can we as retail investors do this?
It’s quite simple, we buy Mutual Funds, or Exchange Traded Funds aka ETFs.
They are like a stock made of hundreds of stocks, with a price that is more stable over time than single stocks.
Mutual Funds and ETFs are less risky and will increase your chance for not losing money.