10% of your portfolio should be in 12 stocks representing 11 different sectors and 90% should be in the S&P 500. Of the stocks (10%)they should have steady earnings, low P/E ratio, steady dividends, great revenue,their charts should have a continual upward movement, stock price should increase steadily, and they should outpace the S&P 500 for the past 5 years, even in this bear market! Don't buy penny stocks, in fact, purchasing a stock is like buying a fine wine...invest in the best mid 50s and upper 90s are great start. Don't question the experience of the experts, namely, Warren Buffet or Charles Schwab or Tom Gardner when they say "if you can't own a stock for 10 years, don't own one for 10 minutes." "Set them and forget them." If you invest in this way you will most likely get some winners, some that do nothing, and some serious loser stocks. You should sell the losers and add to your winners (assuming you have held them for 10 years+). Your winners assuming you take the advise should award you high enough to keep you positively ahead of the game. Keep a well diversified portfolio so that if one sector gets hammered (ex. yr.2000 for techs), the others won't (airlines, oil, manufacturing,etc...) and vice versa. Do not invest on margin. Do not subscribe to $395 "guru" newsletters that promise you that if you follow their way you will be a millionaire/grow your portfolio by 3500%, don't take tips from friends, don't use back-tested methods, don't day-trade.Know that inflation eats away your money if you don't invest, and know that the best return historically on your money has always been stocks which outpreform: savings accounts, bonds, tax-free bonds, CDs, money-market funds, and to some degree even real-estate! And also know that if you put your investment money in the S&P 500 you are likely to beat 85%-95% of all actively managed mutual funds! Also keep in mind that you should not be taken away by a fund that went up 100% for the year, because most likely the next year it won't still be preforming as well, and in most cases the years that follow will be losing returns that will eventually preform lower than the S&P 500. Plus keep in mind the 8th wonder of the world...compound interest! Do your homework, and pay attention to the market and not what you speculate. If you can have a ROTH Ira! that's invested in the S&P 500! There is more to learn but this is a cheat sheet for you.oreck----A real fool!!! Please recommend this post so that other beginners can avoid the pitfalls in stocks.
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