Making it by investing in the stock markets is not a simple task. It requires a lot of research, analysis, discipline, and patience. You need to have a clear strategy, a diversified portfolio, a risk management plan, and a long-term perspective. You also need to be aware of the market trends, the economic indicators, the company fundamentals, and the news events that can affect your investments. Investing in the stock markets is not a get-rich-quick scheme. It is a serious business that involves risks and rewards. You should only invest what you can afford to lose and never put all your eggs in one basket. If you follow these principles, you can increase your chances of making it by investing in the stock markets.
- What is stock investing? A share of stock represents a share of ownership of the company. If you’re a stockholder, you own part of the company. The stock market consists of individual stocks of publicly held companies that are issued, bought and sold. They’re either traded on a stock exchange or in the over-the-counter market. Shares provide companies with access to capital, and shareholders buy a slice of ownership in the company in exchange.
- Past performance isn’t an indicator of future performance. You’ve probably heard this disclaimer before. You can’t time the market to trade stocks. It’s impossible to predict the turns or fluctuations that the stock market will take. With dollar-cost averaging, you can attempt to minimize risk from the ups and downs of the market.* Dollar-cost averaging is an investment plan that lets you invest a set amount at regular intervals, regardless of what the market is doing. Your best investment is to buy fewer shares when stock prices are high and more shares when share prices are low. Dollar cost averaging allows you to do this.
- Risk tolerance and financial goals are partially based on age. Conventional wisdom holds that younger people can take more risk because they have more time to ride out volatility in the market. Those nearing retirement should play it safer. Figuring out your investing goals and the asset classes you wish to invest in can help with a diversified portfolio. Choose from different stocks of large-cap companies, bonds, exchange-traded funds, index funds or mutual funds.
- Certain types of brokerage accounts offer specific advantages. Most people who are new to investment decision-making have a specific goal in mind for their trading account, such as saving for their retirement or a child’s college fund. There are special investment accounts designed to help you reach those goals. Traditional and Roth IRAs, as well as employer-sponsored accounts like a 401(k) or thrift savings account, help you save for your retirement plan with tax advantages. A 529 college savings plan helps you save for higher education with tax advantages.
- When you sell stocks for a profit, you’ll need to pay capital gains tax on the earnings. Your capital gain, or profit, may be short-term or long-term. Long-term capital gains are usually taxed at a lower rate than short-term capital gains, so it often pays to hold on to your stocks for more than a year.
- – Research the company’s fundamentals, such as earnings, revenue, cash flow, and growth potential.
- – Diversify your portfolio across different sectors, industries, and asset classes to reduce risk and volatility.
- – Use a buy-and-hold strategy to benefit from long-term compounding and avoid short-term fluctuations.
- – Rebalance your portfolio periodically to maintain your target asset allocation and take advantage of market opportunities.
- – Invest in index funds or exchange-traded funds (ETFs) to gain exposure to a broad range of stocks with low fees and high returns.
- – Set a budget and stick to it. Don’t invest more than you can afford to lose and don’t let emotions influence your decisions.
- – Review your performance regularly and learn from your mistakes. Seek feedback from experts and peers and keep improving your skills and knowledge.
Top performing stocks for 2023
Amazon (AMZN): The e-commerce giant is expected to continue its dominance in online retail and cloud computing, as well as expand its presence in new markets such as healthcare, gaming and advertising.
- Amazon’s revenue growth slowed down to 2%-8% in Q4 2023, but analysts expect it to rise 5% in 2023 and 12% in 2024
- Amazon’s operating income and diluted EPS improved in the first two quarters of 2023, thanks to cost-cutting efforts and efficiency gains
- Amazon’s AWS and advertising segments remained fast-growing and profitable, while its e-commerce division posted massive losses
- Amazon faced challenges from the macroeconomic environment, customer satisfaction issues, and its failed investment in Rivian Automotive
Tesla (TSLA): The electric vehicle maker is poised to benefit from the global shift to clean energy and transportation, as well as its innovations in battery technology, autonomous driving and solar power. he electric vehicle and clean energy company that has been disrupting the automotive industry. Tesla has been delivering record numbers of vehicles, such as the Model 3, Model Y, and Cybertruck. Tesla has also been expanding its global presence, such as building factories in China, Germany, and Texas. Tesla’s revenue increased by 39% in the third quarter of 2023, and its stock price jumped by 96% year-to-date.
Shopify (SHOP): The leading platform for online entrepreneurs is projected to grow its revenue and user base, as more businesses and consumers embrace e-commerce and digital payments. Shopify has been benefiting from the growth of online shopping, especially during the lockdowns and social distancing measures. Shopify has also been investing in new technologies and partnerships, such as integrating with Facebook Shops, Instagram Shopping, and TikTok. Shopify’s revenue rose by 46% in the third quarter of 2023, and its stock price soared by 88% year-to-date
Microsoft (MSFT): The software giant is likely to maintain its strong position in cloud computing, enterprise software, and gaming, as well as leverage its acquisitions of LinkedIn, GitHub, and Nuance to diversify its offerings and reach new customers. – Microsoft (MSFT) stock has gained over 30% in 2023, outperforming the S&P 500 index.
- The company’s revenue and earnings beat Wall Street’s expectations in the first quarter of fiscal 2024, driven by strong growth in its cloud business
- Microsoft’s cloud business, which includes AI products and solutions, grew 19% year over year to $24.3 billion, with Azure and other cloud services growing 29%
- AI services contributed about 3 percentage points to the cloud revenue growth, indicating that Microsoft is leading the new AI platform shift
- Microsoft has exposure to multiple high-growth niches such as cloud services, digital transformation, AI, and cybersecurity, which could fuel its long-term growth
- Microsoft is also partnered with OpenAI, a research organization that develops cutting-edge AI technologies such as ChatGPT, which could give Microsoft an edge over its competitors
- Analysts expect Microsoft to grow its earnings by 15.6% annually over the next five years, which could translate into higher stock prices
- Based on one estimate, Microsoft stock could reach $1482.9 by the end of 2023, implying a 48.29% annual return
Netflix (NFLX): The streaming service is expected to keep its edge over competitors in the global entertainment market, as it invests in original content, expands into new genres and regions, and improves its user experience and personalization.
Upstart Holdings, Inc. (UPST)**: This company provides artificial intelligence-powered lending platforms that enable banks and other lenders to offer personal loans. It has grown its revenue by 250% year-over-year in the third quarter of 2023 and expects to reach profitability by the end of the year. It also recently acquired a leading auto lending platform, Prodigy Software, Inc., and plans to expand its offerings to other verticals such as mortgages and student loans.
UiPath, Inc. (PATH)**: This company is a leader in the robotic process automation (RPA) market, which enables businesses to automate repetitive and mundane tasks using software robots. It has more than 9,000 customers across various industries and regions, including 80% of the Fortune 10 and 63% of the Fortune Global 500. It has increased its annual recurring revenue by 64% year-over-year in the third quarter of 2023 and expects to grow its total addressable market to $60 billion by 2024.
Coinbase Global, Inc. (COIN)**: This company is the largest cryptocurrency exchange in the U.S. and one of the most trusted platforms for buying, selling, and storing digital assets. It has more than 73 million verified users and over $400 billion in total trading volume in the third quarter of 2023. It has also diversified its revenue streams by launching new products and services such as Coinbase Card, Coinbase Commerce, Coinbase Earn, and Coinbase Ventures.
Roku, Inc. (ROKU)**: This company is the leading streaming platform in the U.S., with more than 56 million active accounts and over 18 billion streaming hours in the third quarter of 2023. It offers a range of devices and software that enable users to access thousands of streaming channels and content providers. It also generates revenue from advertising, subscriptions, transactions, and licensing fees. It has grown its platform revenue by 79% year-over-year in the third quarter of 2023 and expects to benefit from the ongoing shift to streaming and cord-cutting trends.
Zoom. One of the top-performing stocks for new companies in 2023 is **Zoom**, the video conferencing platform that has seen a surge in demand due to the pandemic and the shift to remote work. Zoom has been expanding its features and services, such as offering cloud phone systems, webinars, and online events. Zoom’s revenue grew by 54% in the third quarter of 2023, and its stock price increased by 72% year-to-date.
Thanks for reading.