There’s no denying that being part of the stock market is a risky venture. Despite volatility however, it’s something you want to be a part of. The stock market can be a scary place, especially for individual investors who are new to the game. Throwing in $1,000 and watching it drop down to $900 in a weeks time can be a rough blow. Short-term emotion has a lot to do with the demise of new investors. A certified financial planner from Beyond Your Hammock, Eric Roberge, put it as “no one likes to lose money, but it’s important to take a long-term view and not make decisions in short-term volatility.”
Trading terminals are great tools for making educated decisions. It’s important to not that the market acts in a cyclical manner. Overtime, there have been considerable highs (like 2017) and considerable lows (2008). A dip in stock value might be scary, but it also presents a great buying opportunity. If you can put a short-term loss behind you, there’s room for great gains. Because anything can happen given changing economic factors, the stock market seems almost mysterious to some people. Those are the people who would rather play it safe and invest in something that are more a sure thing. Roberge commented on this matter with, “if you look at the long-term results of owning a single family home in the suburbs, the gains on average aren’t great, maybe around 3% if you take out inflation, it’s less. If you have a long-term horizon, the stock market is going to produce better results based on history.”
Now, you aren’t going to see great upside if you just throw your money into stocks via a mobile app without doing your due diligence. If you’re considering putting serious money into the market, you should either consult with a broker, or do your own research. Many brokers nowadays have trading terminals, which include things like live charts, direct market access, and risk management features. These white-labeled terminals are mostly customizable to their own firm and aid in growing their clients portfolios, including yours.
Deciding to invest is a better decision when it’s earlier in your lifetime. It’s important to set goals and restrictions, like how much you can afford to investment, and how much you can bear to lose. If you’re young and begin saving for retirement, you have plenty of time to avoid risky stock buying decisions.
Another distinction that new investors take for granted is portfolio diversification versus a homogeneous portfolio. This is something that brokers with trading terminals can provide both their own knowledge on, as well as the AI knowledge of the terminal. Stocks are much more volatile overall than bonds are, but they show a better return historically over time. If your portfolio is made up of 100% stocks, you want to make sure that they have varying degrees of betas (a measure of risk) and are in multiple industries. If diversified properly you can minimize your own portfolio’s loss when the market seems to be on a dive.
It seems as if we’re going to see either a correction or a large plunge in the market sometime soon. Though analysts have been saying this for a few months now, it can happen at anytime. In order to be prepared for the worst, you should make sure you’re satisfied with how your portfolio is currently diversified. You may have loved a stock a year ago as it rose to it’s high, but how will you like it when that is your only owned stock and it crashes? Now is a great time to move things around and prepare for better or for worse.
If you’re dealing with anything more than some extra money you could bear to lose, you should go through a broker or financial planner. These professionals have tools like trading terminals that even have mobile platforms for you to follow along in the process.