Ever feel like you suffer from information overload? That is, there are so many voices out there giving you advice and so much insight to soak in that it almost becomes too much to deal with?
It’s a classic phenomenon that plagues new traders and those trying to get a handle on the stock market for the first time. From your local bookstore to any given Google search, the amount of information out there on the stock market is absolutely staggering.
Unfortunately, much of this information is often contradictory and leaves much to be desired for newbies who seem to have no idea what they’re doing. As a result, sometimes the best pieces of advice for new traders and investors is the old-school, tried and tested quotes that apply to anyone regardless of their experience level.
So, what classic quotes and wisdom should new traders keep close to their hearts? We’ve outlined eight nuggets of knowledge to take with you on your trading journey to help you along the way.
“Everyone has the brainpower to run the stock market.”
Perhaps one of the most important pieces of advice from master businessman Peter Lynch, do not assume that the stock market is an exclusive club where only insiders can succeed. Spoiler alert: anyone can play the markets, granted their willing to do their homework.
“Timing is everything.”
Paying attention to the timely nature of stocks is essential. Between understanding stock seasonality to looking toward future investments, always keep the clock in mind when it comes to your portfolio.
“Look before you leap.”
Research is obviously paramount to anyone’s success as a stock trader. Looking at the condition of the markets and listening to sound advice prior to an investment represents the bare minimum that anyone should do before spending a dime.
“Be the tortoise, not the hare.”
Although this might seem cliché, the stock market is akin to a marathon versus a sprint. Slow and steady trading will almost always trump those who go in head first in pursuit of quick success.
“Don’t put all your eggs in one basket.”
Diversifying your stock portfolio is crucial to keeping yourself from losing everything in one fell swoop. Try to find a successful investor who stuck to a single stock and you’ll realize that such a person doesn’t exist.
“When it rains gold, put out the bucket, not the thimble”
No truer words have been spoken by Warren Buffett who notes that opportunities for transformative trades are indeed rare. Therefore, you should capitalize on such opportunities when they do arise. If there is a particular trade that presents itself with reasonable risk and a huge ROI, don’t be afraid to jump on it.
“Investing isn’t about beating others at their game.”
This piece of advice from Benjamin Graham speaks to the sort of “rat race” of the stock market. In other words, you should focus on what you’re doing versus constantly comparing your success to others. As long as you’re seeing returns, what everyone else is up to should be an absolute afterthought.
“When you invest nothing, the reward is worth little.”
Simply put, you can’t expect much out of the stock market if you’re not willing to put in the time, cash and effort. This doesn’t mean that you should drop everything and dump all of your money into stocks, but rather understand that you’re not going to randomly turn a few pennies into millions overnight. However, consistent, steady trading can pay dividends over time.
There’s no denying the inherent difficulty of navigating the stock market for the first time, but it’s certainly not impossible. With these old-school pieces of wisdom in the back of your mind, you can feel more confident about your day-to-day decisions as a newcomer to the game.