The number one guideline you should use when starting your portfolio is, figuring out your investment term. Will you be investing on your own or are you going to use a broker. Brokers charge fees for their services, but they also give you a head start on investing, because they are full-time with the market and how it all works. Ensure that you research your broker before picking one who had good track records.
The number two guideline for growing your investment is to research the companies you wish to pour money in. Look at the managment people running the companies, what is their track record? Have they work for other companies that have failed? Search for companies with low debt, cash flow on the positive side, and consistent earnings. You don't want to invest long-term in a company that has consistent losses. However, it does not mean because a company fell short a few times you want to drop them off your portfolio immediately. At times a company goes through changes to keep pace with the demands of a changing world economy. During these change periods they may experience lower or negative performance. You need to keep a hawk eye out on what is happening in the company. Don't be afraid to invest in new companies, sometimes these will provide the best results for you. Make sure to do your research on each company and who runs them. Begin with a smaller investment with them and grow that investment as the company performs well.
The number three guideline is to keep your eye on what is going on around the world and in the news. The stock market reacts poorly to bad news. Also, as we have seen with oil prices as of lately, wars and unrest in places that produce and export oil severely effect what the stock market price is going to be. Be aware that just because a situation is bad, doesn't mean that you will lose value on your stock. For e.g. as we stated about the oil, the turmoil creates a lack of oil supply, the price increases, if you had stock that deal with oil, you would have made money. You need to think deeply through the situation at hand and how it may or may not effect each one of your stocks
The number fourth guideline you should follow while learning your investment strategies is to have a diversified portfolio. Invest in different public companies across different product types and services. Don't have all your companies that are in your portfolio all electronics distributors, or all oil companies, diversify. If all your companies are all of the same types of business, if something happens with your product type, your portfolio will start to sink deeply. So, keep it all well rounded. Give some thoughts to bonds and mutual funds as other investments in your portfolio as well.
You need to figure out how long you want to invest, there are not too many things, if any, you can do that will turn a profit overnight. Successful stock investing comes down to working hard, seeking the advice of financial experts, doing your research homework and keeping up with what is going on in and around the world. Follow these hints and you should be well on your way to learning how to make money in stocks.
