A study done by Bankrate found that 52 percent of Americans don’t own any stock or stock-based investments. Even more alarming, 74 percent of adults under 30 own no stock at all.
[Source](https://www.moneyunder30.com/value-investing)
The major reasons cited for this were that most of them either didn't know much about stocks or they thought stock trading is too risky.
I'm here to show you all it isn't too risky and it's easy to learn how to do it.
“Long ago, Ben Graham taught me that price is what you pay; value is what you get. Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.” – Warren Buffett, from his 2008 Berkshire Hathaway Chairman’s Letter
In this article I want to draw in on tips you can use to reduce risk and grow your stock portfolio.
In previous articles I drew in on technical analysis in other words research.
This is probably the most important tip I can give. In your analysis you are looking for stocks trading below their intrinsic value. We spoke about the book value and important ratios we can use to analyse whether a stock is trading below or above it's book value. We want to look at other things we can do.
Diversity
It is important as an investor to spread risk. You do this by investing in stocks from different unrelated industries. For instance May pick some stocks in the finance sector, others in the food sector and others in the energy sector. This ensures when one sector is experiencing a situation your whole portfolio isn't affected. This is an advantage when a sector is performing poorly.
Stick to the facts
Never be emotional when picking stocks. There is no right or wrong only sound business decisions.
Have Discipline
It's always tempting to buy a stock that just happens to be on the market and it's that rare steal opportunity or a stock that is appealing is there for the taking but it violates all the principles you set for stock picking. Don't be tempted stick to the plan.
It's very easy to become successful at investing and it's becoming more and more accessible to all of us. We just need to take that first leap of faith and we can all be Victors.
