Learning to wisely invest your money can pay you huge dividends in the long run. Also, it gives a better rate of interest than any bank or financial institution if industry returns are compared over a long time. This is why many people choose to invest in the stock market. However, doing so is no easy feat and there are plenty of risks associated with the stock market. It is important to develop discipline in order to make rational and sound financial decisions.

If you’re planning to invest in stocks, take a look at some of the stock market tips and tricks that you can put to good use:

1. Diversify your portfolio

According to experts, it is important to have a diversified portfolio. You should buy stocks of different companies and the purchases should also be spread out over time. This ensures that even if any particular security fails, the chances of failing are quite unlikely. The gains made from the basket of stocks that haven’t failed should be enough to recoup your losses from a few potential rotten eggs. Therefore, unless there’s an overall market failure, you ought to be well protected. This is the strategy followed by many investors and it has paid well in the long run.

2. Stocks outperform bonds

It is well-known that the stock market generally outperforms bonds. If you wish to invest your money in bonds, it means giving up huge earnings over the same period of time that could’ve been made over the stock market. The S&P 500 shows a consistent 10% growth over 30 years now. Therefore, it is highly unlikely for bonds to take over stocks any time soon. Experts believe that the returns of bonds are not going to rise any time soon and comparing the two shows that buying equity is a far better bet.

3. Nobody can time the market

It is unwise to think that the price of a stock will fall in the future and you can somehow get in at that time. Stock markets are very volatile and it is important to pick an asset allocation and stick with it throughout. Instead of pulling out your money when stocks fall, keep your money locked in because the market can go up in the long run. Studies indicate that generally over 10 years, the value of a stock will rise and give satisfactory returns. Therefore, there is no specific “right time” to enter the stock market.

Equity investing has proven to give significant returns over other types of investments. Along with providing liquidity, it is also transparent and overseen by the government. It is important to follow the stock market tips from experts and be patient in order to stay invested and wait for the gains to come trickling in.