A Few Things to Consider Before Buying Stock
A few quick things to consider before buying stock in the market.
Updated April 18, 2010
Here are few things to think about before buying stocks:
- If the money you are using to buy stock with will be needed in the near future, then don't put it in the stock market.
- If the money is for retirement, you may be better off putting it in a Mutual Fund and letting a professional manage it for you.
- Make sure you can afford to lose money, because you will not be right 100% of the time.
- Be sure you have an exit plan in place. In other words, make sure you are ready to cut your losses if a stock doesn't do what you think it might do. Depending on your strategy, you might exit your position in a stock if it dropped 15% from the point you bought it at.
- On average, over the past 59 years from the year 2010, the BEST months for stocks are November through April. The WORST months are May through October. The average return of the S&P 500 during November thru April was 5.9%, while May thru Oct was just 0.67%.
There are lots of other things to consider, so if you're an investment beginner and the stock market is new to you, I'd definitely recommend that you read "How To Make Money In Stocks" by William J. O'Neil.