A Beginner’s Guide to Investing: 5 Tips Every Newbie Investor Should Remember

Posted by Eric LeRiche | January 9, 2009 .

Are you new to investing? You’re probably excited to get your investment portfolio going. You’ve been keeping tabs on the investment world by watching financial news every night and eagerly waiting for the hottest stock tips so you can get your share of the proverbial pie.

However, before you put in all your life savings into buying stocks from a supposedly hot company (thanks to a tip from your brother-in-law), pause for a bit. Read the 5 top stock tips below that every newbie investor should consider. This can mean the difference between turning up a profit and living in the dog house a few months down the road.

Beginner’s Guide to Investing Tip #1: Get help from a full-service stock broker.

You’re new to investing so you basically have zero knowledge. If you know something about investing, it’s probably very minimal. Unless you’ve got a lot of dough to burn, you want to have a full-service stock broker by your side when you start investing. Sure, you feel confident enough of your investing and stock buying knowledge, but think of a professional stock broker as a lifeline. He can help you make the right investing decisions. A professional stock broker can also be your sounding board; you can tell him about any major financial decisions you’re considering and see what he thinks of it. Basically, a professional stock broker can be your friend from inside the world of investing. He can give you really good stock tips so you can make better investment decisions.

Beginner’s Guide to Investing Tip #2: Learn as much as you can about investing.

Even with a full-service stock broker by your side, it’s still recommended that you try to learn as much as you can about investing. If you’re leaning towards growing your portfolio by investing in stocks and bonds, learn as much as you can about trading stocks and bonds. If you’ve got your eye on a company stock you think will turn up a profit for you, find out more about the company and its track record in stocks. You may have a good gut feeling about a company, but it’s wise to couple that with some research so that you can make your decision based on facts. Don’t be content with simply sitting in the sidelines and letting your stock broker do all the work for you; learn about investing and know how you can invest your money better.

Beginner’s Guide to Investing Tip #3: Develop patience.

If you’re impatient by nature, try to develop patience because you’ll need it when you enter the world of investing. Understand that majority of investments don’t pay off right away. Don’t expect to turn a profit a week after investing on a company; it doesn’t happen that way. You’ll find out quickly enough that you’ll be losing money in some investments in the beginning. Know that this is actually natural; it takes a month, six months or even 12 months before you can see a profit from your investments. Just because the stock you just bought the other week loses a few pennies today doesn’t mean you should sell and get out.

Beginner’s Guide to Investing Tip #4: Curb your impulsive tendency.

Aside from patience, you have to also tame your impulse. You’ll come across hot stock tips that are going to be profit makers for you. There’s nothing wrong by investing on them occasionally. However, if you hop from one hot investment to the next every third day, that isn’t a sound way to invest at all.

Beginner’s Guide to Investing Tip #5: Don’t get too obsessed with investing.

Don’t end up obsessing over your investments that you hardly spend any time to relax, spend time with your family and basically enjoy life. Make those investment decisions now and then. Keep tabs on what’s going on in the investment world, but don’t doggedly follow them for most of your waking hours. Your investments are important since it’s your financial future at stake, but practice moderation; your investment portfolio isn’t and shouldn’t be the center of your life.

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