10 Best Ways to Understand the Stock Market

I'll share a secret of my success with you when it comes to investing or trading in the stock market. Nothing comes easy without practicing. It took me 10 hard years from losses to gains to feel real comfortable in my knowledge as a trader in the stock market. I no longer trade stocks as often as I did. However, I have incorporated this same idea with mutual funds in my retirement account which had given me consistent 25% annual returns over the past 10 yrs. With a small amount of money, I was able to achieve my goal, which was to retire my husband early, and that was without contributions.

I have had so many of my friends and acquaintances come up to me and say they have always wanted to learn about the stock market. However, even though I offer help, they don't follow through to sit with me. There is no osmosis to teach you to be a good investor or trader. You have to experience losses. There is not one good trader out there who didn't suffer a loss. However, that was always the best way to learn. I have put together what I feel are ten good tips to start you on the right foot. I would caution you to paper trade first, before buying your first stock if you are still unsure. This means you are practicing on paper your "buys" and "sells". You can build confidence by paper trading first.

Here are ten good tips on how to enter the stock market:

1. Only invest what you can afford to lose.

Because there is risk in the market, you need to realize you can lose all your money. Hopefully, you wouldn't ride the stock all the way down, however, I have seen beginners do that because they didn't understand risk.

2. Check your emotions at the door.