So, you want to start investing. Yes, kudos to you. Not all have the guts to start something they haven’t done before. Now, its time for you to learn how to invest in stocks.

Believe it or not, investing can be fun although a scary one as well.

There are a ton of money-making opportunities in investing. Whether you want to invest $100, $200, or something more, your money can grow faster than what banks pay you via interest.

I particularly like stock market investing. I am a nerd who likes to see, analyze, and interpret all those charts you see on the NYSE, Bloomberg, etc.

Let’s take a look at the rules of investing you need to do be mindful of to succeed in….. investing.

 

How To Invest In Stocks: 10 No-Brainer Hacks For Newbie Investors

Regardless of the knowledge or lack thereof regarding investing, there are ways or basic rules in investing that you, as a potential investor, can use whenever you make your investment decisions.

1. Start small and learn from it.

“How To Invest In Stocks:  Rules on Investing” necessity meter: High

Test the water. That’s how you should start.

I mean, you just don’t drive without learning how to drive first. You don’t become a doctor without going to medical school. Same thing applies to investing.

For those who want to invest in the stock market but are not sure how to or uncomfortable doing it, Acorns is a great way to start investing in the stock market.

You can invest as little as $0.01. Acorns rounds up your purchases and invest those cents across 7,000 stocks and bonds to improve your return while reducing risk.

Plus, Acorns will give you $5 sign-in bonus to make you feel comfortable. #cleverinvesting

I’ve had Acorns for 7 months and my investment is already around $2,000, which started with cents.

Sign up and start with Acorns here.

Read: The Secrets To Becoming Debt Free

 

2. Put some on safe-mode. 

“How To Invest In Stocks:  Rules on Investing” necessity meter: High

You can make a lot of money or lose a lot of money in any kind of investing.

That’s why it’s important to stash away some of your money in safe investments (e.g., certificate of deposit and savings).

While I have at least 50% of my investments in the stock market, the rest of my money is safe with CIT Bank.

I use CIT Bank to save my money. I earn 1.55% APY, which is over 25 times the national average of 0.06%.

Granted, I’m not going to be rich off saving money in the bank, but it’s safe, better than CD rates, and it’s still free money that’s good enough to pay some of our family’s expenses. Since there are no monthly fees, CIT Bank is a double win.

It’s best to put some of your money on the safe side, and that’s why putting it in CIT Bank savings’ account is a great option to go for.

Click here if you want your money to grow with CIT Bank.

 

3. Always track your investments.

“How To Invest In Stocks:  Rules on Investing” necessity meter: High

Investments are meant to be tracked. That’s one of your duties as investors.

Whether you are investing in real estate, stock market, or a company, it is necessary to keep hawk’s eyes on your investments.

One great platform to use to track your wealth and investments is Personal Capital.

It is a free service that allows you to sync all your financial accounts into one location. Personal Capital features budgeting, 401(k) analyzer, display of upcoming bills, asset allocation target, and many more.

Best of all, it is FREE to use. I’d use this in a heartbeat.

Remember, failure to keep track of your investments can cause you financial distress in the the future.

Click here to use Personal Capital for FREE and track your investments once and for all.

 

4. Invest based on your goal and not on what others do.

“How To Invest In Stocks:  Rules on Investing” necessity meter: High

Remember that just because a lot of people invest in specific investments does it mean that you need to invest there too. Your investment goals may or may be different from them.

If you have your goals defined, but don’t know how to reach it, Betterment is a great place to start.

Betterment is a well-trusted, automated, goal-based investing service. You can start with it for FREE.

Betterment uses its technology to help you make more money, has unlimited advice to help you make smarter decisions, and has personalized portfolios built to help you invest the way you want.

Best of all, it doesn’t charge additional trading fees and transfer fees. Yeah, it’s a double win, to say the least.

Click here to start with Betterment and start reaching your goals.

Read: How I Made At Least $29,000 In 10 Months As A New Blogger

 

5. Realize that not all investments are equal. 

“How To Invest In Stocks:  Rules on Investing” necessity meter: High

Classic trap, that is, newbie or even intermediate investors think all investments are created equal. They’re not.

With so many options to choose from, knowing whether your goals and investments are aligned is a challenge. One mistake could ruin your financial future.

A couple of years ago, my friend introduced me to Blooom. I thought I knew my 401K very well being the investment-nerd that I am. I was wrong.

Seriously, ouch! I fell on the classic trap. Not anymore though.

Blooom analyzes your 401k for FREE. It will spot hidden fees, tell you if your portfolio is too aggressive, and find out how much you could be missing out on by DIY-ing your 401k.

A lot of its clients cut their hidden investment fees by 46%. Blooom clients’ collective lifetime fees saved is over $776,465,300 and counting. That’s one for the books.

Bottom line: You want your investments to work for you and not the other way around.

Click here to get your FREE analysis with Bloom.  

 

6. Be prepared (for the worse).

“How To Invest In Stocks:  Rules on Investing” necessity meter: High

Never assume that your investment will always make money. Don’t assume that because you’ve done your assignment of researching and weighing both risks and potential rewards that you will earn returns from your investment.

The truth with investing is that most investments don’t promise returns except for a couple of investments or insurances like annuities, certificate of deposits, and the likes.

Just remember that if investments always make money for the investors, then, all people would definitely put their money into various investments. Nothing is promised with a lot of investments.

Be prepared to lose money or gain money. No one wants to lose and everyone wants to gain.

The reality is, your investments can go either way or it can stay flat. Most people will try to predict the outcome but this prediction is nothing but a guess of what the results will be.

Read: Survive Stock Market Crash – 4 Tips You Need To Know

 

7. Be prepared (for the opportunities)

“Rules on Investing” necessity meter: High

One of the things I learned from my professors in both the undergraduate and graduate schools is to always be vigilant on opportunities that you come across with. The same reasoning applies to investing.

As an investor, you need to re-visit your investments from time to time. You need to this in order to make sure that your investments are still aligned with your purpose. In addition, you need to re-visit your investments to make sure that what you have are the best possible opportunities for you.

If you happen to find other opportunities, then, make sure to re-balance your investment to take advantage of such opportunities. One tip before investing is that you need to make sure your investments are flexible, which means that you won’t be penalized if you ever re-balance your investments.

For example, you will get penalized if you want to pull your certificate of deposits (before their maturity dates) so you can move the funds that have better returns.

On another note, some investments cannot easily be changed. If you happen to invest in the real estate market, it is true that even when you find other opportunities for your money, you may not be able to take such opportunity. This is because house investment is as not as liquid as other investments.

Read: Personal Budget Categories To Start Your Budget

 

8. Set aside emotions.

“How To Invest In Stocks:  Rules on Investing” necessity meter: High

Never mix emotions with investing. To make it clearer, invest logically not emotionally.

Take the Great Recession in 2008. The stock market lost -36.55% and a lot of people pulled out their investments of the market in that year. In 2009, the market went up by 25.94% and a lot people still had their investments tied to safer places in that year.

Do you see where I am going with this statement? I want to say that many people become emotional when something bad happens. It’s called human emotions or human nature and it’s natural. But when it comes to investing, you should always set your emotions far away as much as possible.

Remember, it’s always in your best interest to be logical and not emotional. Always remember what comes down must come back up. It’s the same with the stock market deep in 2008 and rise in 2009.

Read: 7 Perfect Jobs For Stay-Home Parents To Earn Money

 

9. Diversify.

“How To Invest In Stocks:  Rules on Investing” necessity meter: High

You’ve probably heard the saying “Don’t put your eggs in one basket”. I always like that statement because it simply summarizes that idea of diversification.

When it comes to investing, never invest all your money in one particular industry or type of investment. You can always diversify your investments by buying or going into the stocks, real estate, business, among others.

You need to diversify for a couple of reasons. One, you need to diversify in order to spread the risks associated with every investment you have. Second, you need to diversify investments between liquid and non-liquid investments because you’ll never know when you need to pull one or some of them out from the market.

Third, you need to diversify because your investments may serve different purposes such as retirement, college education for your kids, etc. This means that you may need to pull out some of the investments early while some may need to stay in the market longer. Basically, you have different needs that have to be addressed in different timeframe. These needs cannot be satisfied by investing in one fund or type of investment.

There is a value in diversification. When one investments goes south, your other investments may go up or remain flat, which will help your portfolio recover. There is no sector that is fully shielded against risks. Every sector and every type of investment can be exposed to risks and diversification of investments can help in spreading out those risks into different types of investments.

10. Be flexible.

“How To Invest In Stocks: Rules on Investing” necessity meter: High

Your investment goal should not be set to stone. Your situation now may be different from your situation 5 or 10 years from now. This means that you need to be flexible when it comes to investment goals.

Recognize the fact that your situation can or will change in the future. You may be single for now but will have a family 5 years down the road. In such case, it is necessary for you to make changes to your investment goals or decisions.

Recognize the fact that some of your investments may end up not aligning with your goals. In such case, be open to make changes in your investment strategies. Once you recognize such changes, take time to learn what other alternative investments you can put your money into as substitutes for your current investments.

 

11. Learn from your mistakes.

“How To Invest In Stocks:  Rules on Investing” necessity meter: Medium 

Your mistakes will be your best teacher moving forward.

Conclusion:

In investing, you’ll learn that not all the things will go your way. You may find yourself making mistakes that can or will cost you money. But use these mistakes as a learning tool to improve and become a better investor.

You need to understand where you made mistakes. Once you learn and understand such mistakes, you will better position yourself in making better decisions.

A lot of people tend to only see the end of the tunnel but not the tunnel itself. When it comes to investing, always make sure that you know the risks and rewards and that you keep in mind your ultimate goal. It’s easy to get sucked into the commotion that goes on in the marketplace but it’s always in your best interest to be rationale so as not to lose your perspective.

What are your rules for investing? Do you invest in the stock market or save the money in the bank?