Investing in US stocks is a great way to build your wealth while leveraging the growth potential of top companies — even if you're a novice investor. With following just a few US share market tips for beginners, you can get started hedging your risks against the comparatively more volatile Indian market.
In this blog, we are sharing with you 9 share market tips for beginners that can take their investing game from zero to some to major. Let’s get started!
When it comes to geographical diversification, the US stock market is undoubtedly your best bet. It gives you access to global tech giants like Google, Apple, Tesla, etc. The consistently deprecating INR against the USD also provides opportunities for higher returns.
With RBI's Liberalised Remittance Scheme (LRS), you can invest up to $250,000 in US stocks.
Once you've decided on your investment goals, time horizon, and risk tolerance levels, you can try these share market tips to navigate the market:
The best way to avoid losses is to be well-prepared. If you can't afford to conduct all the research, opt for a brokerage firm that will do it for you.
If you lack patience or time for research, index funds are perfect. Since index funds (like the S&P 500) have a diversified portfolio of assets and generally perform at par with the underlying index — you minimise your risks while ensuring more or less steady returns.
This may be one of the most common share market tips for beginners you might’ve heard! As a beginner, you may have to shoulder some losses. Be prepared for it by capping your investment exposure. You can always increase your exposure once you get accustomed to the market.
Don't simply buy shares on the advice of a friend or co-worker. Never make an investment decision unless you understand what the company does and how it generates profits. Instead, sticking to the tried-and-tested names like Amazon or Apple makes more sense for a beginner.
If you're starting out with a limited investment budget, consider buying fractional shares (less than one whole share) instead. With this you can diversify even a small portfolio by investing in companies that would otherwise be out of your reach.
Blue-chip stocks are safer for new investors due to their strong balance sheets and consistent earnings growth, while Penny stocks are riskier with greater volatility and potential losses.
This is a share market tip for beginners as well as novice investors. Since you'll be investing in US dollars, you must keep the conversion charges in mind. Remitting money to a foreign trading account will cost you in the form of exchange and transfer fees. P.S. keep a close eye on the 2023 Budget, as some tax-related implications may affect this.
Don't buy stocks when the price is low, anticipating an upward swing for the same, only to witness the price fall further. Instead of this futile exercise, you should focus on company financials and performance records to gauge the value of a stock.
If you want to start investing in the US stock market, there's no better time than the present. Also, remember that wealth creation takes time and patience. Thus, a long-term strategy may bring better results than a short-term one.
Armed with these US stock market tips, you can start your journey today and expand as you develop your skills and knowledge. If you're still overwhelmed with the complexity of the US market, you can count on Fi Money. Perfect for novice investors, Fi enables you to invest in top US companies — at industry-best forex rates. So you can own shares in Apple, Tesla, Microsoft, and so on! With an intuitive user interface, Fi simplifies the world of US Stocks alongside their FINRA-regulated broker partner, Alpaca Securities. Besides in-app explainers, novice investors can use Curated Collections (like All-Time Favourites) to make decisions. What's more, there are zero withdrawal charges for US Stocks on Fi.
Your stock choices will depend on your investment strategy and risk appetite. As a beginner, proven blue-chip stocks - like Apple and Google - may be your best bet.
The best stock market investments are those that bring you high returns. Dividend and growth stocks are generally considered the best stock market investments. Index funds are also promising options for beginners.
Here are some crucial tips for beginners entering the share market:
Beginners can educate themselves about the functioning of the share market by following some basic steps:
Potential risks in share market investments include market volatility, company performance issues, liquidity challenges, lack of diversification, and timing errors. To manage these risks, beginners should focus on diversifying their investments across different industries and types of stocks. They should also conduct thorough research on companies, analyze financials, and consider investing for the long term rather than trying to time the market.
