Tech stocks are dangerous for new investors because it is hard to learn the idea that once you hear the news, it is too late to invest on that news. In other words, if you hear on the news that some amazing new product is coming out that everyone will buy..... the price of that stock has already gone up because of that product and you are probably buying at a highpoint. When you start as a new investor, stay away from companies that are in the news for ´new products´... they are just going to cause you to jump on the bandwagon after the music has already stopped playing.
This is a great question, I'm also interested in investing in the stock market and have never done it. These answers are really helpful and I will definitely do my research.
If I were to invest in stock as a beginner, I must have an intelligent understanding about valuation metrics. Gives me an idea on calculating outstanding shares and market prices. I'm talking about the the 100th millions outstanding shares and trading prices. Then, the market capitalization is determined. Microsoft is leading the charts uptrend. Google, second.
Besides the shameless self-promotion that is going on in this post, this is a very good piece of advice. You should really just invest in a market that you can comprehend. It does you no good to put your money in something that you know nothing about in the first place.
If you are not familiar with how to value a stock or evaluate to fundamentals of a company, then the best thing you can do as a beginning investor is put your money in good growth stock mutual funds and just keep adding to it on a regular basis. This is the best way to build wealth in the market. Don't try to time the market, just put your money in it and leave it there. When the market drops, buy more shares at a discount. the market overall, over the long term, has a historical average of returning about 10% a year. If you can achieve this and invest at least 15% of your income, you should be in good shape when you want to retire. Start as early as you can to take full advantage of compounding, which is simply making a return on earned money.
This looks like a sane advice that is safe. I have known several retirees who were reckless with their investment. All they wanted was to earn and take advantage of the time that their money can earn from. In the office, the advice to the retirees is to hold their retirement pay for a while before investing. And if the stocks is the choice then choose the blue chip companies, take note, that's plural to mean don't put all your eggs in one basket.
