Taking action and getting started

Investing in stocks is an exercise in time. Time compounds returns, lets small companies grow into larger ones, lets mistakes fall by the wayside as you take heed of them. The best way to learn about yourself and investing is to actually invest your own money. You can play one of those virtual investing games where the website gives you $100,000 to ‘invest’, but it is not the same as having skin in the game (investing your own money). Most likely you will lose interest and not do it the same way you would with real money.

You can start investing with as little as $500, although it is probably better to start with $1000 or more in each stock if possible so that the cost of buying each share is not too high a percentage of the total cost. Once you invest your money (maybe in something you know about or are interested in) you can see the stock fluctuate daily, get to know the company by reading any news they put out and this may spark your interest in investing. If it does and you see stocks that you want to buy it gives you something to aim for and you may find yourself saving more than you would if you were just putting money in the bank.

Once you invest you will start to notice things and learn things that you may not have read about in books or online and learn about your own investing style.

Freud said: ‘thinking is rehearsing’. If you like a stock and have done the research, understand the company or industry well, there is no reason not to buy it as long as you have the savings. The same goes for selling- if you get a bad feeling about a company you own due to a change in fundamentals or management and you are pretty sure the outlook is not good-you should go with your gut and sell the stock. It may turn out to be the wrong decision, but overall taking action instead of thinking about doing something, will not only stop you worrying about those stocks, but stands a good chance of benefiting your portfolio in the long run.