The Best Advice for Beginners Entering the Stock Market

Written By Mary Beth Eastman
Last updated April 11, 2019

Note: We receive a commission for purchases made through the links on this site. Our sponsors, however, do not influence our editorial content in any way.

April 11, 2019

Simple. Thrifty. Living.

Entering the stock market for the first time can be quite daunting and confusing. You’ll likely hear all sorts of tips and advice from friends and family who are already involved in investing in stocks. Their advice could be good, or it could be bad; they could have just gotten lucky, or they may have invested in stocks that go nowhere.

Listen to their advice, but then do what’s best for you. Consider these tips for beginners entering the stock market, and you’ll be able to make an informed decision regarding your investments.

Don’t expect to suddenly get a winning portfolio overnight. First, determine the reasons you want to invest in the stock market. Do you want to have funds for future retirement, or do you want to be able to cash out in 6 months to a year? Do you want to save for a home or college? Or do you want to be able to leave your children an inheritance?

Determine your goals, and you’ll know better what types of investments you should make. You could trade stocks, or open a retirement account like a 401(k) or a Roth IRA. You could open a brokerage account and let a robo-advisor tweak your portfolio. It’s very easy to get started with an online investment site, and many of them have guides to walk you through your first trade. Check out our list of the best online investment sites here.

Knowing how much you’d like to have will also help you determine what you need to invest. However, keep in mind that nothing is ever certain when it comes to investments, so be prepared to possibly fall short of your goals. Which brings us to risk …

Some investments are riskier than others. Know your risk tolerance, and you’ll be better equipped to stay away from riskier investments that fall outside the range of what you are willing to lose. Research investments to see how risky they may be. If you have set a long-term goal for a retirement fund, you can choose a less risky investment that pays over the long-term. But if you want a good amount of cash back within a year, you may be more comfortable with a riskier investment that might pay out.

The stock market isn’t the place to let your emotions rule. Don’t let someone you know get you all excited about a particular stock that you rush blindly into investing. Do your own research. Additionally, don’t let your insecurities about a particular stock you have invested in cause you to make a hasty decision. Again, research and understanding of the market is key.

It may be wise to sit down with an investment advisor that you feel comfortable with, and go over all the basics first. There’s a lot to learn about the stock market, and it would be better to have a broad understanding of the different types of stock market order types and investment accounts before you take any action.

About the Author

Mary Beth Eastman

Mary Beth Eastman serves as the content manager for Simple. Thrifty. Living, where she is dedicated to helping readers use money and credit wisely. Mary Beth believes that access to the right financial information paired with a growth mindset are essential tools for getting out of debt and building wealth. Mary Beth has a degree in Journalism from Bowling Green State University and has focused her 20-year journalism career on putting readers front and center, carefully considering their concerns and presenting information that will help them in their everyday lives. She has won numerous statewide journalism awards. Her writing on personal finance as been featured on numerous websites in addition to Simple. Thrifty. Living, including Huffington Post and Lexington Law blog. Mary Beth resides in Pittsburgh, Pa., with her family and two rescue dogs.

  • No comments yet. Be the first to get the conversation started. Here's some food for thought:

    Do you have any thoughts?

Submit a Comment

Your email address will not be published. Required fields are marked *