Tips for investing in the stock market

Ten simple tips for investing successfully in the stock exchange

1. First of all, be clear on the goal of the investment. What do we want to achieve and within how long? And, related to this, what risk am I prepared to take in order to achieve it?

2. And of course, what capital should I invest? To decide this, you must understand that investing in the stock exchange is uncertain, so the recommendation is to always invest money that you are not going to need in the short term and to not invest your personal or family wealth. Another recommendation is that, if you are starting to invest in the stock exchange, it is better to invest with small amounts.

3. Choose the broker wisely. The best one will suit how you trade: adjusted fees, powerful information tools, option to carry out conditioned banking and setting a stop loss, etc.

4. Being informed is crucial. Obviously, when investing in the stock exchange you need to be informed on the companies you are going to invest in. It is recommended to read about the new products that they are going to launch, markets they operate in, profit forecast, risks…

5. How many portfolio holdings are recommended? It is estimated that a portfolio between 4 and 6 holdings is enough to monitor the companies and their respective sectors.

6. Big or small companies? If you are starting to invest in the stock exchange it is best to start with holdings of major companies, which you can get more and better information on.

7. Always diversify. Choose portfolios from different sectors, different sizes or different countries. This way, you will have a portfolio of greater and smaller risk to better adjust your overall risk.

8. Never invest against the market. The value of stocks always moves by trends, so always move in favor of it.

9. When should I close my position? We have to watch out for the overall trend of the value. A popular mistake is selling too soon, when the stocks have made some profit or keeping the losses for a long time with the hope that someday it recovers. If you have made a mistake, close the position and wait for when it is better to enter.

10. Pay attention to how you feel. When investing, hasty decisions often don't end well and taking decisions when we are extremely happy or depressed usually leads to taking hasty decisions.