In part three of our stock market tutorial, we’re going to talk about something that is so often overlooked by the new investor. Before we put real money in to investing, we need to practice stock trading.
Would it make since to try flying an airplane without first practicing? How about heart surgery? Just as you wouldn’t participate in anything risky without first having the proper training, you can’t invest in the stock market without first practicing. Luckily, that is very easy to do.
We must first practice stock trading and here’s how. First, put together a portfolio. Because investing in all economic sectors is not practical, try choosing 3 to 5 where you feel confident that you can keep up with the news. If you work in the medical profession, healthcare should be one of your sectors of choice, for example.
Next, pick the best stocks in those sectors. You can pick some of the up and coming stocks but it is much more difficult to make good choices when you are setting up your first portfolio.
In this stock market tutorial, we want to give you specific ways to practice stock trading so the first thing to do is to set up a virtual stock portfolio. There are many places to do that. My personal favorite is Yahoo! Finance. When I was first starting I started a portfolio that I followed for 3 months. I didn’t make much virtual money at the time but I learned a lot.
There are other places to go if you’re not a Yahoo! fan. Google has an application for that, and Motley Fool. Many more work just as well as Yahoo! but pick some stocks and get started.
My final word of advice is this: Not long ago I started trading stock options. You may not know anything about stock options but it’s an advanced investment strategy. Can you guess what I did? I started a virtual portfolio before I committed real money.
Practice stock trading before committing real money. If you don’t, you will lose money. Probably, a lot.
There’s more coming in our stock market tutorial. Let me know if you have any suggestions.