Stock Market Investing Principle 1
Understanding the Stock Market
Your free guide to learning about the basics of stock market investing.
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The first principle of stock market investing is that it is definitely not like a casino. The market does not act like a place where people who are "lucky" get huge rewards for little or no effort. In a casino, you can make some calculated plays, but everyone knows that after a length of time, the HOUSE wins. This is not true with the stock market. In the stock market, people can use all types of research, news, and current economic conditions to make well informed and sound investment decisions.
Try and think of stock market investing like planting a flower or a tree. You take all sorts of steps to pick the right seed/sapling, one that you will be proud to see grow. The type of plant is important, does it need sunlight, lots of water, shade, or a certain soil type. You must choose carefully where your want your plant to grow. You feel assured that if you have made solid preparations, that you will be rewarded with something beautiful to look at. The same thing goes for building, ie growing a large and beautiful stock portfolio.
Stock market investors plan their portfolios in this manner. They have learned that over the years, consistency is the key ingredient to being successful. Contributing money from your pay or savings on a usual schedule and continuing to invest in up or down markets will prove triumphant.
Now, investing on these proven concepts does not seem as exhilarating as winning it big at the casino with no effort, but you will be far better off with much lower overall risk and a larger reward.
Take a look at the other principles on this website to learn (plan your planting) about where to invest your hard earned dollar.