Everyone knows of someone who has made it big through investments, but also knows someone who lost all his or her money by investing. The trick is to know which investments are wise and which ones will make someone else rich at your expense. By doing your research and following the tips in this article, you stand a better chance of success.

You should always investigate the fees that you will be liable for from a broker before you register with them. Be sure to inquire about entrance and exit fees, as well. You’d be surprised how quickly these fees can add up.

Do not forget to exercise your right to vote if you happen to own common stocks. Depending on the company charter, you might get voting ability when it comes down to electing board members or directors. There are different options for voting. Some voting can be done by proxy through the mail, and in some cases, it can be done at an annual shareholders’ meeting.

Look at stocks as owning a piece of a company, instead of paper that is shuffled around. Take the time to analyze the financial statements and evaluate the strengths and weaknesses of businesses to assess the value of your stocks. This will help you make wise stock market decisions.

Instead of an index fund, consider investing in stocks that beat the 10 percent annual historical market return. Find projected earnings growth and dividend yield to estimate likely stock returns. Stocks yielding 4% and which have a 10% earnings growth rate may produce a return of 14%.

Use a broker online if you feel comfortable doing research on your own. Fees and commissions will be cheaper online than those of brick-and-mortar brokers. Since your main goal is to make a profit, having a low operating cost is ideal.

Choose a broker that works both full service as well as online in order to have the most flexibility. Working with such a broker lets you split your total investment into whatever proportion you like, handle part of it yourself, and turn the rest over to your broker. This strategy offers you the control and professional investment advice.

Know your areas of competence and stay within them. When investing by yourself, whether through an online or discount brokerage, you should only search for businesses that you have some understanding about. Although you may be able to predict the future of any company, you won’t always understand companies that make oil rigs. Work with a professional broker or advisor to make these kinds of investing decisions.

Keep investment plans simple when you are beginning. You may be tempted to become diversified overnight by trying every investing strategy you’re aware of, but it’s better to use the one thing that you know works, especially if you’re a novice. Taking it slow at first will be sure to pay off over time.

Do not purchase too much of your company’s stock. There is nothing wrong with wanting to show your support of where you work; however, it is always smarter to diversity your portfolio and not keep all your eggs, or you cash, in one basket. Like any other stock in your portfolio, you don’t want to depend too heavily on any one; you want to diversify so that if any one stock falters, you don’t face losing all of your wealth.

As mentioned, pretty much everyone knows people that have both done well and been creamed by the stock market. This happens regularly. Luck certainly affects this to some extent, but if you are wise in your choice of investments, and back them with knowledge-based trading decisions, you put yourself in a position to be one of the winners. Take the advice in this piece to heart in order to invest in a way that is likely to generate real profits.