I am a novice when it comes to trading so appreciate any feedback.
Due to the current situation with Covid19 I see an opportunity in the stock market to invest for the long game. However, I have a question?
Prior to me buying the shares I’ve eyed up does it make sense to wait a month or so to see the real economic impacts of this virus? I am thinking that when the government takes away its support packages we will see the real damage on the economy and there will be further stress on the FTSE? This being the case it would be better to invest a few months from now or at least wait a little.
For me, i’m taking small positions into stocks, then adding further to those positions as the price decreases. It’s a form of timing the market but also trying to cost average in.
Covid19 may become Covid20 … 21 … 22 ??? Who knows.
Only use capital you can afford to lose or be without for a while.
I totally agree. If you can afford the risk then allocate the amount you have for each stock and then probably buy a fraction over a few weeks. As long as you have done your homework and selected solid companies with strong balance sheets that are likely to survive the Covid-19 crisis then you should be fine. But a word of caution ; steer clear of companies in the oil and aerospace industry for now.
TsotFin I don’t understand the focus on avoiding oil companies. We aren’t going to move away from fossil fuels in an instant, it’s a long drawn out process. I’d also be confident the likes of shell and BP are dabbling in renewables and even have the finances to absorb some of their competitors through acquisitions. Manufacturing output will at some point increase and gas and oil are needed for this, the factory I work in is not going to change over night and the assets stripped and replaced.
I am not criticising just would appreciate if you can elaborate on your point. Isn’t money made through avoiding herd mentality.
It was just cautionary advice for anyone new to trading and investing. The oil industry is a bit too volatile and if you aren’t an experienced investor you may give yourself a heart attack. From my own experience, when you get into trading with real money you go through a roller-coaster of emotions and it may be overwhelming. That could put someone off the trade altogether. I was merely suggesting caution above anything else. I’m sure there are plenty of people killing it in that industry but I just don’t think it would be a good starting point for a novice.
Also remember that in investing you WILL lose money. The difference between winners and losers is winning more times than losing and good risk management. And remember this is not a get rich quick scheme
