Learn three simple yet important principles for investing in stocks that can separate you from unsuccessful investors.
Before imagining the three principles, it’s a good idea to know why you want to buy stocks. Whether due to speculation or in the long run. The main motive for buying securities may be that you are looking for an opportunity to place your money appropriately, which will generate money in dividends for you in the distant future. For this to happen, you need to buy quality securities. And it is done. We have just briefly discussed what is needed to buy shares. To make it easier to understand, we will now discuss all three important principles in more detail.
Only invest in quality stocks
While you may not be an experienced investor, investing in securities that regularly bring dividends is profitable and makes sense for your purchases. At the same time, the value of really high-quality shares will continue to grow in the future. This is despite the fact that the situation on the capital market is the opposite and, according to analysts, a number of securities should rather weaken during the course of this year.
Conservative dividend yield
If you buy or hold shares just for dividend payments, you’re doing well. Quality dividend shares should not be missing in any investor’s portfolio. In our terms and conditions, you can buy shares of companies such as Apple or Walmart. In order to easily evaluate the quality of the company that issues the shares, all you need to do is follow the amount of dividend yield. If the yield is higher than five percent, it is a relatively economically healthy company.
Regular investment for a long time
When investing in stocks, expect a long investment horizon. Regular investing in stocks can be clearly recommended. You won’t be fooled into saying that you will not count on the money invested in stocks in your financial plans. You will simply forget about them. At the same time, however, you will continue to invest part of your income in stocks.
Example: If you are now 25 and invest three thousand dollars a month in buying stocks every month for the next 40 years, not only will you save a good amount of money during this time, but you will also protect your money from inflation. You can increase your investment even more by investing back any dividend income you earn over the next 40 years in buying stocks.