One of the most difficult parts of becoming an investor is learning how to track the market. If you’re new to investing, it can often feel completely overwhelming. Resisting the compulsion to log into your account to check on your stocks every couple of minutes can feel almost unbearable. You don’t need to worry — this is totally normal. As you gain more experience, you’ll naturally get better. But when you’re just starting out, there are a few things you can do to get started and speed up the learning process as a new investor.
Gaining a thorough understanding of what trends you’re looking for and what you’ll need to track in order to to invest is vital. There is an endless amount of information about investing on the internet — you could spend forever reading it.
Unfortunately, we don’t have this long. So to speed up the process, we’ve compiled a list of tips that will help you to track the market as a new investor.
1. Choose a reliable broker
A broker, whether an individual or firm, will essentially act as an intermediary between you and an exchange — usually in exchange for a fee or a commission. Depending on what you’re looking for, they can also provide you with important research or investment plans. There are many different types of brokers — which type you need depends on what your specific goals are.
Like with pretty much anything on the internet, the best way to find a reliable broker is to read reviews by other people.
Review websites are a great way to find broker reviews written by real people. If a broker has lots of good feedback, it’s probably worth checking out. Likewise, if the reviews are bad or mediocre, it’s probably best to steer clear.
2. Set up a portfolio tracker
Lots of sites, including the likes of Yahoo and Sharesight, will let you set up a portfolio tracker where you can enter the number of shares you bought, and the price you bought them at.
Many of these sites will also show you the recent news associated with your stocks, and they’ll provide you with information about the historical share prices to help you along.
3. Keep up with the news (within reason)
Portfolio trackers that show you the news associated with your stocks are a good start, but if you really want to get up to speed, you’re going to have to read more widely. Make it a habit to spend a few minutes each morning scanning the news to get an overview of what’s happening. There are many ways to do this — you can subscribe to a newspaper to read while you’re eating breakfast, bookmark a few websites to check before you answer your emails each morning, or even listen to podcasts while you’re in the car on your way to work.
Be aware, daily news events probably shouldn’t alter your investing strategy too much, as you’ll want to avoid altering your investing strategy too frequently — especially if you’re using a broker. Trading lots will rack up your commission costs, and you could end up losing any profits you manage to make.
4. Look at each company’s quarterly and annual reports
Quarterly and annual reports are a great way to get some insight into a company. If you invest in individual stocks, you’re going to want to make sure that you tune in to listen to key members of each company talk about their results.
Websites like Seeking Alpha also provide full transcripts of these calls. Yearly reports, which are usually released in April, are a good way to get a glimpse into what the company has in store for the future.
5. Keep track of interest rate, labor, and commodity trends
High interest rates often drive down stock prices because it means that companies are generally paying more money towards loan payments. If labor costs increase, company costs will naturally increase — particularly companies that hire staff at minimum wage — and that will also cause stock prices to decrease. Commodity prices will vary by industry. Companies that rely on oil will suffer when oil prices increase, while companies that source oil will thrive. You’ll want to know what to look for depending on what you’re investing in, and plan accordingly.
Being an investor doesn’t mean you have to frantically sign up to notifications from every news platform or open your trading app every five minutes to keep an eye on how things are going (if you do that, you’ll burn out fast). It’s about learning to manage your expectations and approaching everything with a long-term perspective.
Remember, no matter how much research you do, there is always a chance that you will lose money when it comes to investing. You should only invest what you are comfortably willing to lose.
