The Best Strategy for a New Investor

There is great excitement in watching your baby take her first steps.

Slowly…carefully…she gets up…walks a step…then falls down…then again she gets up…takes a step…then again falls down.

The process repeats till the time she learns how to balance her body while taking her second step, and her third step.

As a parent, you would love to hold her hand while she’s learning to take her first steps, but then you want her to do it herself so that she gets some confidence on her own.

This process of learning happens in whatever we do in our lives.

We first learn to take baby steps, before we cross bigger hurdles.

There’s no reason the cycle should be any different when it comes to investing in stock markets.

When you are just testing waters, it’s always good to start small by allocating small amount of money to stocks, and then increasing the allocation gradually.

Instead, what most new investors do is jump into the stock markets with 100% of their savings from the first few months of their job or business, and 0% knowledge about what they are getting into.

They enter the markets assuming it to be a 100-meter dash where they can place big bets and multiply their money in a short span of time.

All the patience and hard work with which they had carved their careers all these years, is forgotten when it comes to handling their money.

You see, investing in stock markets isn’t a 100-meter race. It’s a marathon, which requires a great amount of stamina and the right mental framework if you are looking to win it, or at least complete it.

Of course, you will fall a lot of times i.e., make losses on your investments. But if you don’t start small, one big loss can wipe you out of markets.

So the best strategy for a new investor must be to start early (remember the power of compounding) and start small.

Remember this…start early, start small.