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1. Be specific what your goal is. Want to retire comfortably in your own small house, doing what you enjoy? Want to put your kids through college first and foremost? Want to buy a boat and sail around the world? Decide what your primary goal is and fit various investment opportunities according to how well they match it. Having a laid out plan diminishes the risk of you reacting to market fluctuations and making irrational decisions. They are usually costly.<br />
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2. Come up with a strategy. Stock market investing tactics and strategies are a dime a dozen. Any Google search or trip to your local library or bookstore will present you with a dizzying array of choices. Faced with such a wide range of options, you're better off deciding on one strategy that you're most comfortable with and that fits your style, and going with it. Leave yourself open to the possibility of making a minor change here and there but have those changes be the exception rather than the norm.<br />
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3. Determine potential risks. Make sure that you're able to correctly determine risks that undoubtedly come hand in hand with every opportunity. One way to do so is to look at your potential investments with as critical an eye as possible, and to devise your management plan accordingly. You'll be happy you did because you will be able to minimize your losses even in the event that a particular investment turns out to be a money-losing proposition. Notice how this step comes before profit assessment? This is to make sure you don't get overwhelmed with excitement before you size up the gamble you're taking.<br />
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4. Gauge profit potential. Based on the profit potential of your investment, you should be able to determine price points where you sell and get out. One of the biggest hurdles for novice investors is knowing when to get out of an investment. They eventually wait too long and lose some of their on-paper gains.<br />
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5. Look for other options. You can look around and see if there are any comparable (or better) investments in therms of risk, profit potential, or simplicity of management. This little extra step can simplify a lot of things for you, not to mention make you some extra money in the long run.<br />
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6. Analyze the obstacles. If you did go through the trouble of having an initial strategy, you will find that this step is a natural continuation of it. By anticipating the possible shortcomings of every investment, you put yourself in the position of doing just that.<br />
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7. Have your plan B ready. This one relates to point 4 and reinforces the need to have set thresholds, whether you're riding a winner or have to get rid of an albatross loser. You absolutely need to set specific boundaries as to when you should get out of an investment, either to prevent you from losing on your returns or just to avoid losing more money than you already have.<br />
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8. Choose the right investments. Investing takes time, so for one last time look over your new project as a whole. Now you've got all the pieces to see the puzzle as if it was completed, and can determine if this investment is really worth your time and effort. And if it isn't, there's no need to dwell on it: starting a new plan is certainly less painful than losing a couple thousand dollars because of an ill-advised investment plan.<br />
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9. Reach for the stars. After you've made the decision to put money into such and such investment, it's time to stop over-analyzing and start taking action. As it turns out, even if you picked the absolute worse investment, you won't have lost everything you own because you did your homework and set limits to your losses. Your game plan, as long as it is sound, will produce solid returns in the long run if you stick to it.<br />
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10. Debrief. At least twice a year, take a look at your plan and how you've fared in your investments. If somehow you bombed and lost a lot of money, try to figure out what went wrong so that those mistakes don't keep on dogging your investing efforts. Above all, don't give up; if you do, then you won't have any lessons to draw from those mistakes. Keep tweaking things until you find your personal success formula. Once you've cleared that hurdle, you're set.</div><div class='uawresource'><div style='font-style:italic;' class='uawabout'><br />
About the Author:<br />
</div><div class='uawlinks'>Before you invest, make sure you read our extensive <a href="http://moneygalaxy.com/understanding-the-stock-market/stock-market-success-for-beginners/">stock market success</a> report. You can also find more financial advice on our <a href="http://moneygalaxy.com">personal finance blog</a>, Money Galaxy. </div><br />
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