4 Essential Tips to Get Started DIY Investing
DIY investing is easier than ever before, thanks to low-cost online brokerage platforms and an unprecedented glut of useful data available online. That's all great for new investors, but you should still be careful to avoid some common pitfalls if you're going to dabble in the market. Most DIY investors are unsuccessful, according to repeated quantitative studies by Dalbar that show average individual investors trailing total market returns by two to three percentage points.
DIY investors can fail for a number of reasons, but heeding these four warnings can help avoid those issues that sabotage too many portfolios.
Investors buy stocks to achieve long-term returns. Those gains come from rising share prices that stem from strong business performance, as well as dividends the company pays out. In contrast, speculators purchase stocks simply because they believe the price will rise in the short term, regardless of the company's fundamentals. There's nothing inherently wrong with speculation, but it requires some guesswork and luck, and in my opinion, it's best left to the quants and technical analysts.
Source Fool.com
