You’re our first priority.
Every time.

NerdWallet, Inc. is an independent publisher and comparison service, not an investment advisor. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. They are not intended to provide investment advice. NerdWallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. Examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues. Our estimates are based on past market performance, and past performance is not a guarantee of future performance.

We believe everyone should be able to make financial decisions with confidence. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free.

So how do we make money? Our partners compensate us. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. Here is a list of our partners.

7 Stock Tips for New Investors

These stock market tips will help you understand how to invest wisely and learn how to build long-term wealth.

Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.

The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.

How is this page expert verified?

NerdWallet's content is fact-checked for accuracy, timeliness and relevance. It undergoes a thorough review process involving writers and editors to ensure the information is as clear and complete as possible.

Dayana Yochim

Writer

---

Dayana is a former NerdWallet authority on investing and retirement. She has written for The Associated Press, The Motley Fool, Woman’s Day, Real Simple, Newsweek, USA Today and more. She has written and contributed to several personal finance books and has been interviewed on the "Today" Show, "Good Morning America," NPR, CNN and other outlets.

Writer

Dayana is a former NerdWallet authority on investing and retirement. She has written for The Associated Press, The Motley Fool, Woman’s Day, Real Simple, Newsweek, USA Today and more. She has written and contributed to several personal finance books and has been interviewed on the "Today" Show, "Good Morning America," NPR, CNN and other outlets.

Robert Beaupre

Head of Content, Small Business

---

14 years of experience

Expertise

• Small business finances
• investing
• banking

Robert Beaupre leads the SMB team at NerdWallet. He has covered financial topics as an editor for more than a decade. Before joining NerdWallet, he served as senior editorial manager of QuinStreet's insurance sites and managing editor of Insure.com. In addition, he served as an online media manager for the University of Nevada, Reno.

Published in

Head of Content, Small Business

Robert Beaupre leads the SMB team at NerdWallet. He has covered financial topics as an editor for more than a decade. Before joining NerdWallet, he served as senior editorial manager of QuinStreet's insurance sites and managing editor of Insure.com. In addition, he served as an online media manager for the University of Nevada, Reno.

Alana Benson

Editor & Content Strategist

---

6 years of experience

Expertise

• Investing for beginners
• financial advice
• long-term investing

Alana Benson is an editor who joined NerdWallet in 2019. Historically she has covered a wide variety of investing topics including stocks, socially responsible investing, cryptocurrency, mutual funds, HSAs and financial advice. She is also a frequent contributor to NerdWallet's "Smart Money" podcast. Alana has appeared on FOX Houston and the "PennyWise" podcast and has been quoted in MarketWatch and The Sun. Before joining NerdWallet, she wrote two books on identity theft and several young adult nonfiction titles. Her work has been featured in The New York Times, The Washington Post, The Associated Press, MSN, Yahoo Finance and MarketWatch.

Published in

Editor & Content Strategist

Alana Benson is an editor who joined NerdWallet in 2019. Historically she has covered a wide variety of investing topics including stocks, socially responsible investing, cryptocurrency, mutual funds, HSAs and financial advice. She is also a frequent contributor to NerdWallet's "Smart Money" podcast. Alana has appeared on FOX Houston and the "PennyWise" podcast and has been quoted in MarketWatch and The Sun. Before joining NerdWallet, she wrote two books on identity theft and several young adult nonfiction titles. Her work has been featured in The New York Times, The Washington Post, The Associated Press, MSN, Yahoo Finance and MarketWatch.

Stock market tips likely won't make you a millionaire overnight, but a solid, long-term investing strategy might make you a millionaire over 20 years. Need to back up and learn some basics? Here's our guide for how to buy stocks.

7 stock tips for beginner investors

Here are seven stock tips that might actually help you build wealth over the long-term.

Brokerage firms

on Charles Schwab's website

on E*TRADE's website

on Vanguard's website

on Fidelity's website

1. Practice with fake money

If you're nervous about putting your hard-earned dollars in the market you can try it out with fake money first. Paper trading allows you to practice investing without risking your cash. You can use a stock market simulator to help you get the hang of the market and become comfortable with its daily fluctuations before putting in real money.

» Check out the best brokers for paper trading

2. Actually invest your money

It's important to know what's an investment versus what's an account. For instance, a Roth IRA is a type of investment account. If you add money to a Roth IRA you aren't invested in anything. You have to purchase investments, such as funds or stocks, from your investment account. Some investors add money to an account and wonder why it hasn't grown over the years. This mistake can cost you in the form of lost compound interest.

» Check out the best investment accounts for stock trading

3. Explore funds over individual stocks

Many new investors are focused on finding the right stocks to invest in first, but financial advisors often caution against investing heavily in individual stocks. Funds, such as index funds, exchange-traded funds and mutual funds are baskets of individual stocks grouped together. Funds let you invest in lots of stocks at once. That means if one of the stocks in your fund goes out of business your portfolio likely won't tank. If you had put all your money into that one stock, it probably would have.

4. Research stocks the right way

If you do decide to invest in individual stocks, you’ll come across an overwhelming amount of information as you screen potential companies. You might be attracted to a company because you like its product — and that's a great starting place. But you also want to know how this company operates, its place in the overall industry, its competitors, its long-term prospects and most importantly, if it's profitable.

» Learn more: How to research stocks

5. Check your emotions at the door

“Success in investing doesn’t correlate with IQ … what you need is the temperament to control the urges that get other people into trouble in investing.” That's wisdom from Warren Buffett, former chairman of Berkshire Hathaway and an oft-quoted investing role model for investors seeking long-term returns.

Keeping a cool head when the market is plunging can be difficult, but it's usually better to stay invested through the low times and allow the market to recover. This will typically allow you to recoup your losses and then some.

» Read more: How to invest during a bear market

6. Keep an investing journal

Writing down why you're invested in each of your investments can help you make better decisions when you're trying to figure out whether you should buy or sell them.

Why I’m buying: Spell out what you like about the investment and the opportunity you see for its future. What are your expectations? What metrics matter most and what milestones will you use to judge its progress?

What would make me sell: Write out an investing "prenup" that spells out what would make you sell. We’re not talking about stock price movement, especially not short term, but fundamental changes to the business that affect its ability to grow over the long term. Some examples: The company loses a major customer, the CEO’s successor starts taking the business in a different direction or a major viable competitor emerges.

7. Know your strategy

Time, not timing, is an investor’s superpower. The most successful investors buy investments because they expect to be rewarded over years or even decades. That means you can take your time in buying, too. If dumping a bunch of money into the stock market at once makes you nervous, here are two buying strategies that reduce your exposure to price volatility:

Dollar-cost average: This sounds complicated, but it’s not. Dollar-cost averaging means investing a set amount of money at regular intervals, such as once per week or month. That set amount buys more shares when the stock price goes down and fewer shares when it rises, but overall, it evens out the average price you pay. Some online brokerage firms let investors set up an automated investing schedule.

Buy in thirds: Like dollar-cost averaging, “buying in thirds” helps you avoid the morale-crushing experience of bumpy results right out of the gate. Divide the amount you want to invest by three and then, as the name implies, pick three separate points to buy shares. These can be at regular intervals (e.g., monthly or quarterly) or based on performance or company events. For example, you might buy shares before a product is released and put the next third of your money into play if it's a hit — or divert the remaining money elsewhere if it's not.

» No brokerage account? Learn how to open one

Helpful resources