The stock market isn't magic and no one can predict with accuracy how it will perform. However, there is a ton of money to be made by investing in it and there are several ways to protect yourself from losing big. Following are 3 stock market secrets that will keep your money safe.
1 ) Diversify. If you have all of your money invested in one stock and it goes broke you'll lose your entire investment. The best idea is to have a diverse portfolio with both high and low risk stocks. If the high risk stocks pay off you stand to win big. If they don't, you've got the low risk stocks to pick up the slack.
2 ) Have a back-up plan. Having a certain amount of money held back as a cash cushion can help tremendously. If you want to make aggressive and risky buys that you have reason to believe will pay off big, it can be difficult to justify if you're spending your entire savings. However, if you have a nice cash cushion to get you back in the game should the worst happen, you'll be able to invest in the stock market with confidence.
3 ) Balance. Not only do you not want to focus all of your stock on one high or low risk type of stock, you don't want to focus on one industry either. You want to make sure that your portfolio covers a range of different industries