New To Investing? Here Are Some Common Mistakes To Avoid And Tips To Follow - Deepstash
New To Investing? Here Are Some Common Mistakes To Avoid And Tips To Follow

New To Investing? Here Are Some Common Mistakes To Avoid And Tips To Follow

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New To Investing? Here Are Some Common Mistakes To Avoid And Tips To Follow

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Betting on a hot stock isn't worth it

Despite news headlines on life-changing investments on one stock item like GameStop, it is too risky to make short-term bets with sizable sums of money on what a stock is going to do next. Instead, some of the most respected investors in the world have long said the best way for everyday investors to make money is to invest in index funds and hold those investments over long periods of time.

Most index funds offer low fees and will allow you to essentially buy the entire stock market. That way, if any one stock crashes it won't affect your portfolio. 

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The key to everyday investing is diversification, which means owning different types of investments to spread out the risk. You definitely want to own stock index funds because stocks over time have always offered the best return. 

You need investments that can do well when stocks are doing poorly. These include Treasury bonds and real estate funds. 

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Checking in with a financial adviser is strongly recommended by experienced investors, but make sure you're speaking with a fee-only expert, who isn't receiving commissions for steering you into one investment over another. 

Once you find someone acting in your best interest, try to meet with them once a year or every two to three years. Find someone you can pay a flat fee for each visit. This will save you money in the long term.

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There is no need to panic, even in times of big corrections in the market. With a diverse investment portfolio, you actually have an opportunity to make some extra money off of big swings in the markets by selling what has gone up in value and buying more of what's gone down.

Don't panic and sell everything just because the stock market crashes and you see other people panicking and getting rid of their stocks. That can do irreparable harm to your portfolio. Buying high and selling low is not a good way to make money.

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