13 Things About Stock Market You May Not Have Known

1. 13 Things About Stock Market You May Not Have Known Many people tend to look at the stock market as a way to make an extra income. While some are looking for quick profits, others prefer to look at the long-term investments. Either way, there are 13 things about the stock market that you probably don’t know. #1: Taxes Can Affect Your Profits When you are considering investing in the stock market, you need to be aware that taxes can cut your profits. And taxes are a lot more severe if you hold your stocks for less than 1 year. For Latest Financial News, visit Smart Money Gains. #2: You Can’t Tell The Difference Between Expensive and Cheap Stocks One of the things that you need to keep in mind is that you can’t truly evaluate if a stock is a good buy or not just because of its current price. Even though you may not have enough funds to buy stocks that quote at more than $100, this doesn’t also mean that a better option is to buy more stocks that are trading at $1. #3: No Perfect Metric While each investor usually has its own preferred way to evaluate stocks before they buy (profit margins, dividend earnings, price-earnings ratio, among others), there is no

2. perfect metric. Just think of a popular tech startup that is priced at 3-times sales and it suddenly moves up to 7-times sales. #4: Investing In Short-Term Stocks Comes with Significant Risk If you are looking at short-term trading, you need to understand that you would be taking a lot more risks. The reality is that you can lose the same amount in just one trade as you would in a single year. For Stock Market Research, visit Smart Money Gains. #5: Dividends Are Your Friends When you are considering investing in the stock market, you should keep in mind that dividends are one of the best friends that you can have. Besides getting your dividends, you will be also investing in stocks that aren’t so susceptible to fall off suddenly. #6: Choose Your Brokerage Wisely As you may already know, there are many different brokerages on the market. Each one of them is tailored to a specific type of investor. This is why you may choose a brokerage that offers lower fees but are very hands-off or you may opt for one that has high fees on transactions but offers a lot of help to individual investors. #7: There is No Sure Thing When you are investing in stocks, there is not 100% sure on any trade that you make. However, when you are trying to avoid too exposing yourself to too much risk, then you should look to invest in more solid companies in the long-term. These are usually the strategies that are followed by Warren Buffet or Carl Icahn. #8: Know What You Are Doing Education is crucial and before you jump start with trading or investing, it is important that you understand where you are putting your money on. #9: Diversification Can Be A Good Strategy But Isn’t Perfect One of the things that you tend to read a lot is that you should diversify your investments to decrease risk. While this is a good strategy, the reality is that when you do this, you won’t be able to earn big returns either.

3. #10: Get Familiar With Failings Investment involves risk no matter if you are looking at it from a short-term or long-term perspective. So, it is important that you do your own research before you actually invest. This is the only way that you have to truly know the potential risks and struggles of the company. #11: It May Be Better To Start Out With Index Funds In case you are just starting, one of the things you can do is to invest in index funds. While you wouldn’t make a lot of profits, you will have lower fees and the time to educate yourself. #12: Think Long Term When you are looking for the best way to invest, you should preferably think about long-term investing. #13: Digest Market News Carefully Market news is coming out all the time. However, you need to ensure that you aren’t influenced by the latest stock news immediately. Read the news and carefully evaluate if you need to do something.