Benzinga is the stock market site. The company has transformed over the years from providing stock news to a wide range of offerings that include data feeds, charts, news, trade ideas and the popular “why is it moving” information.
One thing that has transformed Benzinga over the years is the connection to the loyal community. Benzinga’s fans, also known as Zinger Nation, help power the company going forward.
Benzinga recently reached out to the Zinger Nation on Twitter Inc TWTR with a question that led to some great investment advice for beginners:
“What’s one piece of advice you wish someone gave you when you started to trade/invest?”
The question generated a number of responses from Benzinga's 193,000 Twitter followers. Here is a look at some of the best pieces of advice for beginner traders.
1. Use Stop Orders: Several of the comments included advice about using stop orders when trading.
“Someone always has better information than you. The stock doesn’t know you own it. Use StopOrders. Sell losers fast. Add to winners. Use trailing stops on fast-moving positions to lock in profits,” SpacGuru shared.
2. Due Diligence: Another item mentioned by several users was related to doing research or due diligence before investing in a company.
“If you have done your DD hold true to your convictions…sometimes [it] may take a while to play out,” Ruell shared.
The advice covered two points: one about doing due diligence and the other about being patient in some investments as a thesis may not play out overnight and take time.
3. Position Sizing: Another item for new investors is knowing position sizing.
“Position sizing and cutting losses at your stop is non-negotiable,” ColoradoMike81 shared.
4. Buy What You Know: A common investment philosophy has been to buy companies you know, which often leads to consumer staples and blue-chip names in your portfolio.
“Keep it simple and just buy and hold companies that you use and know,” VSeouljah told Benzinga.
The advice can lead to knowing when companies may have good or bad years, as well as resulting in some gems in your portfolio, including ones that you can spot a trend or know when a company is underfollowed or undervalued.
5. Size of Account: JayMunshi offered up advice about how to trade is important.
“It is not about the size of your account but how you trade.”
This advice could be important for newer traders with small accounts. Oftentimes people are worried about the dollar gain or loss on a position and not the percentage. Each account will have a different gain in terms of dollars but it could be the same based on percentage.
6. Never Fall in Love: One item investors often struggle with is knowing when to buy and sell stocks. Emotion can take over, which leads to this advice.
“Never fall in love with any stocks,” Toh Zhiqi said.
Falling in love with stocks often leads to holding on for too long, not cutting losses and not taking profits along the way.
7. Diversify: One of the best pieces of advice might be a one-word answer received by Benzinga.
“Diversify,” William Sacrey said.
Diversification can help a portfolio during red and green days. Users can diversify by holding stocks, ETFs, cryptocurrency and other assets. Diversification can also mean buying stocks and assets of different market caps and in different sectors.
8. Reinvest the Dividends: Many blue-chip stocks pay dividends on a quarterly basis.
"Reinvest the dividends," Christian Manson offered as advice.
Investors have the option of reinvesting dividends into the same stock or using the cash to make additional trades. Over time, reinvesting dividends often leads to better returns.
9. Buy Unpopular Things: Sometimes being early to a winning trade or sector can provide a strong return. Many times the sectors that outperform aren't flashy areas of growth.
"Buy when things are not popular, housing, stocks, commodities," Larry said.
10. Join Benzinga Pro: Mando Trading provides a nice plug for Benzinga Pro with a response of “join Benzinga Pro.” This advice is saved for last as it of course comes with a recommendation to subscribe to Benzinga’s service.
Benzinga is always listening and has launched new items for Benzinga Pro users to continue to give retail traders an edge to beat the market.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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