Start big or small? Tips for investing in a new stock

how to invest in 2022

When investing in a new stock, there are a few guidelines that can help put traders in a favorable position to take advantage of future price developments. Sadly, many novice traders tend to ignore them, though. Instead of adopting a rules-based approach and making rational decisions, they act on hunches, ending up regretting their actions.

Given that 2021 has been a record year for new IPOs, with $594 billion raised by companies all around the world, traders and investors don’t lack new emerging stocks to invest in. Let’s look at a few insightful tips that can be helpful when dealing with the hype surrounding a new stock with positive momentum.

Resisting FOMO

Analysts at InvestingCrypto believe that FOMO (Fear of Missing Out) is the main driving force behind wrong investing decisions. When a stock starts to go up, it gets a lot of media attention, causing wide discourse around it which further reinforces the upward trend. That is fine, until the point when people enter this trend too late and buy at extremely high prices. This ends up in wider exposure to the risk of the trend reversing.

A key requirement, thus, is to spot an emerging trend from its early stage and start small, only to increase exposure as the market confirms the bullish trend.

Working with a professional broker

Especially for those just beginning their online trading journey, it is important to work with a brokerage providing access to valuable market research and analysis. In this case, InvestingCrypto has got you covered, regardless of the account type you are choosing.

When you open an account with this broker, numerous tools and materials are provided to you, so you can make rules-based decisions, and keep emotions out of the equation. InvestingCrypto has a team of market experts that continue to provide insightful knowledge and educational material, helping any person willing to learn.

Also, the WebTrader designed by InvestingCrypto represents a solution that integrates technical analysis tools. Although fundamental factors still weigh in on growth prospects for any given stocks, by combining fundamentals with technicals investors can buy at “areas of interest”, known as support levels. That is where an accumulation of bids can occur, acting as a catalyst for a new wave up.

creating an investing portfolio

Follow risk management principles

One of the major rules of investing is “don’t put all of your eggs in one basket”. That is still relevant in 2022, especially since there are so many different companies with high growth potential. Everyone is talking about Tesla, Snapchat, and other tech-oriented names.

It would be a mistake to gain exposure to only one or two stocks. Instead, investors need to have a portfolio and balance it regularly (once or multiple times per year). This means determining in advance how much capital (as a percentage of the available funds) is allocated for each stock.

Rebalancing means selling stocks that have outperformed, getting exposure back in line with the portfolio allocation requirements, and buying those that have lagged the market, as long as their growth prospects remain intact.