Step 1: Prepare yourself
Decide how much money you’re willing to invest in stocks
There is no ‘right’ or ‘wrong’ amount; the number you pick must be an amount of money you can spare, something that you can risk losing and still sleep comfortably at night.
Divide up this money to cover a few different investments
They say that you should never put all your eggs in one basket, and the same goes with stocks! Once you know how much money you’re comfortable investing overall, you can then decide how you’ll portion out that amount when you invest in different stocks.
Set a long-term time frame and decide on your selling price to avoid emotional decisions
To manage your decision-making and ensure that you don’t give in to short-term changes in stock prices, it’s important that you think on a long-term scale (five- to ten-year horizons). One good thing about being a long-term investor is that you won’t have to keep an eye on share prices every single day, leaving you free to focus on all the other things in your life! You should also have an idea of the price you value the company at, selling only when the stock reaches this price.