Entering the stock market can be overwhelming at the best of times, but with the events of the past few years many people have completely stopped investing. Wealth Within chief analyst Dale Gillham believes now is the time to re-enter the share market and he has put together a simple set of guidelines to live by that will help you reduce risk and ensure you have a high probability of success.
“There is no substitute for a proper education in the share market to increase your success rate, but if you don’t have that behind you I recommend five key things to consider,” he said.
Quality over quantity
The first key Gillham believes is to buy quality shares when investing money into the share market.
“It doesn’t matter whether you own one share or a thousand shares it is the quality of the share you own that counts. If you make 10% on 1000 shares in a small company or 10% on 100 shares in a larger company you have still made 10%. The probability is much high of making money on quality shares as they are more liquid and better managed, therefore investors have more certainty,” says Gillham.
Set limits
To make the market seem less scary, ensure you have an exit point or a way out when you need it. People only worry about a share they own when it is going down, therefore setting yourself limits around this can be a key factor with making you more relaxed with your money, and enables you greater control of your money.
Don’t Speculate
There is only two things anyone can control when investing, and that is when you get in and when you get out. “Once your money is in the market, the market is in control.” As such I suggest you wait until it does something before you can make a decision rather than speculate on what it might do,” explains Gillham.
Say no to software
Gillham believes that one of the things people tend to do when they begin investing in the market, is purchase computer software with the mistaken belief that it will help them with their market choices. Whilst on the surface this can be true, many spend their hard earned on expensive software packages that promise riches from very little effort or capital. Whilst this may seem romantic, it is far from being realistic.
Use caution with marketing companies
A lot of share market education is promoted by companies that are more marketing companies than quality educators. Their tendency is to often paint an overly positive picture view of trading, showing investors how much money they can make and never really showing them how much they can lose, says Gillham. My advice is to do your research and make sure you can qualify and quantify everything they say.
To speak with Dale Gillham, please contact Dale on 0410 585 491 or Glen Scott on 0402 106 508.