Investing Experts: Here’s How To Pick Your First Stocks in 2024

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Everyone who wants to be in good financial shape needs to be investing, and some of that investing should be done in the stock market. This is hardly obscure knowledge, but there are some devils in the details. Frankly, it can be difficult to determine exactly which stocks to invest in when it’s your first time doing so and you’re not being guided by a financial planner.

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How do you pick your first stocks, and what should you look for, particularly in 2024? GOBankingRates talked with expert investors to build out a roadmap for those of you just starting out on your stock selecting journey this year.

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Determine Your Investing Goals (A Stock Screener Can Help)

Yes, you should invest in the stock market, but it’s equally important to do so with intention and goals. This means knowing your time horizon and risk tolerance.

“These factors will be important in helping you select the types of stocks that are suitable for your portfolio,” said Justin Zacks, VP of strategy at Moomoo Technologies Inc. “Consider using a stock screener to help you narrow down possible investments. Once you have a reasonable list, you can do some deep dive research into the fundamentals and technicals of each individual stock.”

Invest in Companies You Understand and Diversify

Never dive into buying into a company or industry you don’t understand or believe in. Additionally, make sure any business you invest in has sound management and strong leadership strategies in practice.

And, as any financial expert will tell you, diversify! You need a sundry assortment as a safeguard against market volatility.

“Diversify by purchasing stock in a wide variety of sectors so that if one area is unexpectedly hit hard by the economy, you’ll have others to fall back on,” said Todd Stearn, founder and CEO of The Money Manual.

Know the Difference Between High-Volatility and Growth Stocks

Understanding the difference between high-volatility and growth stocks is crucial, and it’s a complex concept that, understandably, many new investors don’t comprehend.

For example, Apple and Amazon are regarded as growth stocks.

“If you’re looking for high-risk opportunities to quickly double — or lose — your deposit, Apple or Amazon might not be the best choice,” said Lauris Dziļums, founder and CEO at International Trading Simulation and Financial Education App. “These and other growth stocks offer relatively stable growth, but it takes time to see substantial profits from holding them, if you’re not investing huge sums of money.”

According to TradingView, stocks such as Envoy Medical, Inc and Trio Petroleum Corp are considered highly volatile.

“It’s worth keeping in mind that high-volatility stocks are risky, especially pharmaceutical companies, which can drop in price like a stone after a failed drug trial, new legislation, etc.,” Dziļums said. “A beginner trader must first ask himself what he is looking for — risky bets with high-profit opportunities or stable and relatively safer growth that could result in wealthy retirement capital.”

If Buying Only One Stock, Consider This

You don’t need to dive into buying a ton of stocks. You can focus on just one entity.

“If you are going to own one [investment] only, it should be the Vanguard Total Stock Market Index Fund,” said Adam Nash, CEO and co-founder at Daffy. “Fifty years ago, you could be the richest person in the world and you couldn’t own that basket of stocks that cheaply — now anyone can do it. You can own literally every company in the U.S.”

Ignore Trends and Panic

The stock market is designed for the long haul and engineered to go up and down. Stay calm and carry on, Warren Buffett-style. Similarly, don’t fall for fads without doing heavy research first.

“Buy and hold for the long term rather than panic selling and buying based on trends that may come and go,” Stearn said.

Take It Slow

You may be feeling pressure to invest quickly and aggressively. Resist that pressure; this isn’t a journey to be embarked on in haste.

“Take it slow at the beginning,” Zacks said. “Paper trading is a great way to test your ideas and possible stock investments without risking real money. Invest in what you know. Companies and industries that you are familiar with will be easier to understand and evaluate.”

Never Invest More Than You Can Afford

“Most importantly, never risk more money than you can afford to lose,” Stearn said.

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This article originally appeared on GOBankingRates.com: Investing Experts: Here’s How To Pick Your First Stocks in 2024