5 Simple Rules for Stock Market Investment

  1. Average into the market; invest at regular intervals a set amount. Timing the market is a strategy that usually fails as people are usually poor at judging whether the market is overvalued, fairly valued and undervalued.
  2. Keep a small allocation of your portfolio hedged and try not to be over-weighted in sectors that are highly cyclical.
  3. Use Exchange Traded Funds, Index Funds, and Mutual Funds to gain exposure to markets that you know less about and/or wish to diversify across.
  4. If you are intent upon creating a small portfolio of single stocks try to choose companies which span many industries.
  5. Create a portfolio that fits in with your attitude to risk and try to avoid engaging in too many trades.

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