Simple Stock Market Investing Tips for Beginners

1) Higher Returns – According to Standard & Poor’s, less than 30% of managed funds beat broad market index investing. What’s more over the last ten years the average person that invested in broad based index funds has beaten the returns most mutual fund investors.

 

2) Added Diversification – Diversification lowers risk. If you invest in one individual stock and bad news comes out on the company you could loose a lot of money fast. Now, for instance, if you’re invested in an S&P 500 index fund and one stock has bad news you really don’t care. That will only affect your investment one five hundredth.

 

3) Lower fees – Index funds fees are typically lower and are often around .5%. While the average mutual funds fees are around 2%. Over time this will make a big difference in your overall return.

 

4) Passive investment – When investing in individual stocks or mutual funds it is important to keep your eye on the market and up-to-date with current trends. Investing in broad based market indexes takes less stock market knowledge and requires less time to track.


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