A FALLING STOCK MARKET IS GREAT FOR FIRST TIME INVESTORS
If you are a first time investor with no money in stocks, you should love the fact that the market is falling. For you, everything is going on sale as you can pick up most any stock at a better price than you could just a month ago. For the rest of us that already own stocks, these volatile times mean we are losing money and all we can do is wait and hope things turn around.
Buying anything when it is expensive is something few of us like to do. It doesn’t matter what we are talking about whether it be stocks, food, clothes, gold, or any of the millions of other things we buy every day: paying a high price is something we try to avoid. Especially when investing money, paying a premium price for something can make a person nervous.
Right now, if you want to buy gold, you have to pay an all time high for it at over $1,850 an ounce! That might entail more risk than some want to take but with stocks you can get in way below the all time high for most companies. And the way things are going, if you wait a little longer, the stock market may go down even more. That is just the opportunity young investors and first time investors should be looking for.
Anyone who has money saved up that they can afford to part with, the coming days and weeks may provide a good time to buy stocks and get involved in the market. However, anyone who is thinking of buying stock for the first time should be prepared for it to go down after they invest. Even though the market is already down, it is unlikely they will be able to pick the bottom. With the market being so choppy right now, new investors should be ready to see their stocks go up and down a lot on a daily basis.
Please notice that I have used the words “invest” and “investors” throughout this article which are much different than the words “trade” or “traders”. Trading stocks is much different than investing in stocks. Traders are looking for stocks that they can buy and get a quick gain out of while investors are looking for solid companies that will produce gains over time. With the ease of online trading now days, too many people want to jump in and out of stocks hoping to pick up the quick gains rather than invest for the long term.
It is always my belief that people should learn to invest their money and acquire a solid understanding of all investment options so they can start accumulating a variety of assets that will increase in value over the years. Too few people today learn good saving and investment habits and that is one reason there is such a problem with personal debt in our country. The earlier a person learns how to save and then how to invest the money that they have saved, the better off they will be. We need more educated investors and a good time to get started learning how to buy stocks and manage a portfolio may be right now with the market well off it’s high’s.
