Is It Possible to Make a Living from the Stock Market?

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Can you make a living from the stock market? Yes, but only if you take valuable advice from those who have experience in the field. Here are a few tips to consider if you are thinking of investing in the stock market.

 

Go for Long-Term Investment

Benjamin Graham, known as “the father of value investing,” was famous for advocating buy-and-hold investing. He believed that you cannot get a solid return on your investment if you pull out of the market after every decline. He held the basic belief that financial markets generally provide a good rate of return in the long run. Further, you’ll find if you practice this method that passive investment also involves fewer transactions. As a result, you’ll save money on brokerage costs and taxes.

This general opinion has remained unchanged. And investors who are in the know today still maintain that the safest way to make money from stocks is to hold onto them for a minimum of five years.

How do stocks make money? Many people who opt for long-term investment might decide to earn their money through regular dividends. Still others might aim for long-term capital gains. Although day trading might seem more exciting and some investors make good money from it, it is much riskier. Sadly, most day traders incur losses.

 

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If you need more encouragement to stay the course, billionaire financial expert Warren Buffet is a major supporter of buy-and-hold investing.

 

Opt for Dividend Gains

Invest in a company that is either established or profitable or shows sustainable growth potential. Further, opt for dividend gains rather than capital gains. By doing so, you will be earning a regular, minimum annual income. This will be the case whether the stock rises or falls over the years. What’s more, your dividends could potentially add up to thousands or even millions of dollars.

Additionally, instead of taking your dividend payouts, you could decide to reinvest your dividends and increase your shares. As a result, you would receive higher dividend payments in the future. And you could turn a larger profit if you decide to sell your stocks.

 

Hire a Stock Market Coach

You can learn a lot from someone who has made mistakes and is willing to share what they have learned with you. Therefore, if you have zero experience in stock trading and you’re not sure how to proceed, it might be a good idea to hire an investment coach. In other words, find someone who will act as a mentor.

Although hiring a mentor will be an extra expense, it might be well worth it. This is especially true if you consider the costly mistakes you might make without his or her guidance.

It’s true that there is an element of luck involved in making money from stocks. However, it is comforting to know that it is possible to make a living from the stock market. Moreover, it is actually probable if you make sound choices. Just don’t be blinded by the “make a million in one day” rhetoric. Instead, opt for long-term investments in strong, profitable companies. By operating in this fashion, you just might earn extra cash.

Finally, do your research, educate yourself, and consider hiring a coach. If you do all of these things, you could one day be a successful investor.

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