Don’t let the opinions of others affect your valuation of the business
The general market has “mood swings”. Sometimes people are very optimistic and are willing to pay high share prices. Sometimes the market is depressed and businesses are valued less, causing share prices to go down. This doesn’t necessarily reflect the true value of the business.
Set an allocation in your portfolio for stocks
You should know how much you can afford to invest in stocks. Don’t risk money you can’t afford to lose.
Do your research
Read the business news to learn more about what’s happening in the stock market and in the economy.
Identify companies that you like, read their annual reports and any news surrounding their performance. Also focus on relevant financial metrics. You should know what you’re investing in!
Don’t panic and react emotionally to the market
Remember there will always be short-term fluctuations in share prices. If the underlying business model still works, you don’t need to worry.
Don’t blindly follow stock tips from family and friends!