What are the best stocks for beginners?

What are the best stocks for beginners?

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I strongly recommend investing in low-cost index funds (example Dow Jones, MSCI World ETFs. However, if you want to include some individual stocks in your portfolio (we suggest investing no more than 10% of your portfolio in individual stocks), beginners should consider blue chip stocks from the S&P 500. These are among the most stable companies in the country with a proven track record of delivering long-term returns to investors. They include companies such as Microsoft, Amazon, Johnson & Johnson, Home Depot and AT&T.

In my opinion, for a simple analgesic strategy with high diversification, one should buy ETFs. These exchange-traded assets include the top stocks depending on the industry.

What are cheap shares to buy now?

It is important to know that the price of a share does not tell you everything you need to know about a company you want to invest in with Exness Singapore and Indonesia. The price reflects how much investors are willing to buy or sell the share for - not the intrinsic value of the company or the direction in which the company's share price is moving. Just because a share is "cheap" does not mean it is a good buy.

However, there are ways to find stocks that may be undervalued. This strategy helps investors identify proven companies with share prices that may be lower than the stock is worth due to external factors, such as an overall declining stock market.

How do I know if I should buy shares now?

The truth is that you will never know if it is exactly the right time to buy shares. However, if you are investing for the long term (e.g. more than five years), then the time to buy shares is when you have the money available. Even if the market falls soon after you invest, you have enough time to recoup those losses. And the only way to participate in a stock market recovery and expansion from the beginning is to invest before the recovery starts.

How much money do I need to buy stocks?

If you open a custody account with no account minimums and no transaction fees, you could end up with just enough to buy a single stock. Depending on the company, this could be as little as €10 (remember, though, that cheap shares don't necessarily make good buys).

Some brokerages even allow you to buy shares in fractions, so if you only had €100 to invest, you could buy part of a share like Google, which has long traded for more than €1,000 per share. Of course, the more you invest, the higher the potential returns in the long run. Use our investment calculator to see how compound returns work.

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How many shares should I buy?

The number of shares you buy depends on the amount of euros you want to invest. If the share price is 50 euros and you want to invest 500 euros, you can buy 10 shares. However, if your brokerage does not allow fractional trading and the numbers are not so clean, you will have to round down. If the share price is 51 euros and you want to invest 500 euros, you can only buy nine shares, as 10 shares would cost 510 euros.

How will I know when to sell shares?

When you buy shares, you should not touch your money for at least five years. This is because of the volatility of the stock markets - it is possible that the value of your shares will fall before it rises. You could consider selling your shares if you need cash and they have gone up in value, but that means you may pay capital gains tax on the sale and miss out on future gains over time.

What is perhaps even more important is to consider when not to sell shares. When the market is falling, you may be tempted to sell to prevent further losses. This is widely recognised as a poor strategy because once you sell, you take with you the losses you have suffered. A better strategy is to ride out the volatility and seek long-term gains, with the understanding that the market will recover over time.

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