15 Investing Lessons We Wish We Knew Earlier

Every investor’s personal journey toward wealth building through the stock market looks different. Building a rock-solid and profitable portfolio is often a process of trial and error, and truth is, there are always new lessons to learn along the way. Whether you’ve been trading stocks for years or are new to the game, these are 15 valuable lessons every investor should know.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

There are simply no guarantees when it comes to investing in stocks. The market is cyclical. It will experience tremendous highs and lows. Rather than basing your investing decisions solely on market movements and the wave of emotion that often follows its peaks and dips, keep your focus on the long term. And only buy stocks that you’re absolutely committed to keeping in your portfolio for a bare minimum of three to five years.

ALSO READ: 3 Top Stocks to Hold for the Next 20 Years

It’s easy for your emotions to get in the way when investing, particularly during volatile market times. But, making emotionally motivated investment decisions can be harmful to the long-term resilience of your portfolio. In an uncertain and rapidly changing market environment such as the one investors are currently facing, stick to stocks that you believe in and know well.

And don’t feel you have to buy a stock just because it’s caught up in the latest investor craze. When considering any stock for your portfolio, carefully research the company before taking the leap. Important data that can inform your decision include the company’s fundamentals, current and future projected demand for its products or services, its growth prospects, and industry stance that can inform ongoing growth.

Your journey to grow your portfolio should never be to the detriment of your savings. These days, it’s more vital than ever to ensure you have a solid nest egg to fall back on for any unexpected emergencies or financial needs. In addition to more traditional methods of saving, investing in dividend-paying stocks can also be an excellent way to generate more cash flow to boost your nest egg.

It’s been one year since the pandemic-fueled stock market crash, and investors continue to talk about the potential of another. While no one can predict the future, another market crash could happen in the coming months. Notwithstanding the panic and economic volatility that ensue when the market takes a nosedive, these events can still present viable opportunities for the shrewd investor to buy shares of their favorite stocks on sale.

ALSO READ: 5 Brand-Name Stocks to Buy During a Market Crash

The reality is that building and maintaining wealth through the stock market is near impossible to achieve without a long-term investing strategy. Although a handful of short-term investors may see real profits in the immediate sense, maintaining these wins over a period of years is far more difficult. Investors who choose this strategy are also far more likely to bear the brunt of adverse market headwinds and volatility.

On the flip side, by carefully choosing a diverse assortment of top-notch stocks and holding them for a period of years (in some cases, decades), you can not only better shield your investments from market highs and lows but sustain meaningful portfolio growth.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

The stock market can seem incredibly complex as a new investor, but building your portfolio doesn’t have to be. Keep your investing strategy focused but simple. Determine the level of risk you’re willing to maintain in your portfolio at any given time. Buy stocks that bring a variety of factors to your portfolio, such as superior growth potential, value, dividends, etc. In addition, select stocks from a plethora of sectors to avoid overconcentrating your portfolio on one particular type of company or industry.

A stock may be an intrinsically great buy, but just because everyone else is rushing to scoop up shares doesn’t mean you have to. Besides having a long-term, diversified investment focus, it’s also important to buy stocks that fundamentally align with your personal investment thesis and that you’re therefore willing to keep in your portfolio for years.

ALSO READ: 3 Tips for a More Diversified Portfolio

Even the most experienced of investors make blunders when trading stocks. While admittedly some mistakes may be more costly than others, focus on the lesson to be learned from each misstep and apply your findings to future investment decisions.

When you purchase a stock, you’re becoming a part owner of that particular company. Therefore, be sure to perform your due diligence before you invest in a stock. Review the company’s quarterly reports and other financial records going back five to 10 years. Take a close look at the company’s business model, as well as the services it provides. Also consider what competitive edge the company maintains in the industry in which it operates as a means of evaluating the stock’s growth and upside potential.

The recent short squeeze and meme stock buzz has caught the attention of many investors. While many of the companies that have been caught in the web of Reddit investor mania fail to pass the basic litmus test for a quality buy, there are a few gems among the bunch.

That being said, while investment fads can be tempting to follow, they often have the potential to inflict real damage on a long-term investor’s portfolio. Most of the time, long-term investors should avoid these volatile trends at all costs.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Day trading is by far one of the easiest ways to lose money in the stock market. Not only does it carry a tremendous amount of risk, but the long-term rewards can be remarkably few. Stick to a long-term investment strategy if you want to build real and sustainable wealth through the stock market.

ALSO READ: Forget Day Trading! Buy and Hold These 3 Stocks

No one can say with certainty when the market will next correct or crash, but it is likely to happen at some point. By training your focus on stocks that generally perform well regardless of what the market is up to, you can better recession-proof your portfolio. The inevitability of market crashes and corrections should also factor into your stock-buying decisions.

For example, ask yourself, “Would I be comfortable having this stock in my portfolio if the market crashed next week?” If the answer is yes and the stock meets other fundamental and technical analysis endpoints, you may have just found an excellent long-term buy. On the other hand, if the answer is no, you should consider what other risk catalysts are present in your current portfolio and whether this particular stock is really an advisable egg to add to your basket.

Risk is a reality for every investor, and like the ups and downs of the market, it’s also unavoidable. But, there’s plenty that you as an investor can do to minimize the level of risk present in your portfolio and prepare your basket of stocks for any headwinds that may lurk around the corner. Different investors are comfortable with varying levels of risk, and the decision to introduce higher-volatility stocks into your portfolio is a personal one.

If you do decide to invest in a few high-risk/high-reward stocks, just ensure that these represent a smaller portion of your overall portfolio and are balanced out by more resilient, lower-volatility investments.

One of the most common misconceptions is that you need to have a lot of money before you can start trading stocks. That simply isn’t true. Although a smaller starting investment likely won’t reap you massive returns overnight, you can still experience portfolio growth over time with a beginning sum of just a few hundred dollars. Top-notch growth and dividend stocks are often excellent initial investments for the newbie investor to realize faster gains and generate cash to pump back into your portfolio.

ALSO READ: Got $1,000? Here Are 3 Stocks to Consider Buying Right Now

The reality is, most Americans carry significant debt. In fact, a 2020 study by Experian found that the average American carries roughly $93,000 worth of debt. You don’t have to be free of all debt before you invest. However, it may be wise to focus on slashing any high-interest debt you carry before making a significant investment in stocks.

This could not only result in certain benefits like increasing your credit score and enabling you to add to your nest egg but will also free up more cash to put toward building your portfolio.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

It’s been a wild ride over the past year, and investors are likely to see plenty of volatility ahead. Investors who emphasize long-term portfolio gains and build a stockpile of quality companies can not only overcome these bumps in the road but realize remarkable growth in any market environment.

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