If you’ve landed on my site then you’re probably looking for some quick handy tips for buying stocks right? Otherwise you’d be off in the library working your way through a 1000 page monster book on trading options. So I thought I’d try my best to summarise my essential tips for buying stocks in five easy steps. I’m not saying they’re perfect they just work for me. You could give them a try and see how it goes. In any case, I’m not actually going to recommend stocks to you. Just five ways that you can narrow down your search and make sure you don’t end up losing a total fortune in the market.

Tip Number 1 – Understand Your Market

Buy stocks from an area that you know and understand. If you don’t know anything about tech companies don’t buy their stocks. I don’t know anything about brain surgery and so I would buy any brain surgery…stocks…you know what I mean! The idea behind this is quite simple. You’re likely to judge an investment for the better or worse if you have a little background knowledge about the area you’re investing in. You own’t be starting completely from scratch as you’ll know who the market leaders are and the way the companies business is run. Is it a company who’s at the front of the industry leading while others follow? Or are they riding on another companies coat tails all the way to the bank?

Tip Number 2 – Buy the Market Leader

Only invest in a market leader. If you’ve got the choice of buying stocks in Coca Cola or Pepsi, choose Coca Cola each time. They’re the number one soft drink in so many countries you want to be with the winners. You’re also much better protected should anything happen to that particular marker. The market leader will feel the pain a little less than the rest of it’s competitors. The Coke and Pepsi was just an example I’m not saying buy those stocks or don’t buy them. Just make sure your investment is with the leader of that particular pack.

Tip Number 3 – Think Long Term

Don’t buy stocks for the short term. You’re gambling your money. Think of it as a long term investment and then aim for companies that you’d want to own a part of for a number of years. Try to get into the mindset that an investment is for years and not commodities that you’ll look to trade as soon as you’ve bought them. Or worse, you sell them at the first sign of a blip in the price.

Tip Number 4 – Don’t Panic

I know I still this tip from Douglas Adams but it holds true in this game. Do not check your stock price every day. If you see it sliding by a few points DON’T PANIC! This will always happen. Stocks will always go up and down in price as sure as the sun comes up and down each day. It will happen regardless of whether you watch it or not. So don’t watch it. Do some more research on another potential investment. It’s a much more valuable use of your time.

Tip Number 5 – Try to Keep Trading to A Minimum

If you’re new to the stock market then I doubt you’ll be buying stocks by the million. It’s more likely in the tens or perhaps the hundreds. The problem is each trade will cost you money with your broker. I’d recommend that you only invest 2 to 3 times a year. Save your money and buy in bulk. That way you keep the brokerage fees to a minimum. What I do is save a certain amount each month in a savings account. When I identify some stocks that I believe are undervalued then I whip out the money from my savings account and get to buying in bulk. One time fee is paid and the rest of the money is spent on my precious shares.

So that is my tips for your investing future. I hope you find them useful although I’m sure you’ll find your own path on this crazy investing roller coaster of stocks for beginners. Out of all the tips I’d pay most attention to tip one. If you know your market you have a great start. The technicalities of actually buying stocks online will take care of itself.