A terrible mistake to begin stock investing with is to open a list of stocks and make a random choice. Of course, you might feel intimidated and overwhelmed.

So, never… ever do that.

Instead, follow a guide (like this one) that has the key principles you need to hit the ground running.

First things first, know your goal. Before diving into stock charts or balance sheets, ask yourself what you want to achieve. Are you looking for steady income in retirement? Long-term capital growth? Or simply trying to protect your wealth?

Your goal dictates your strategy: Income investors should look for high-dividend stocks like utilities or REITs. Meanwhile, growth investors target rapidly rising companies, often in the tech sector or emerging markets. And conservative investors stick with blue-chip giants like consumer staples.

Go with an industry you actually understand. Choosing an industry you’re curious about makes investing feel less like homework and more like discovery. Stay on top of trends, read industry news, and build a common-sense thesis. For instance, if e-commerce continues to rise globally, logistics or cloud companies might be worth a look.

Find the stocks that are topping their field. Look into ETFs tracking the sector and see what companies they’re holding. Use stock screeners to filter by metrics like dividend yield or growth rate. Don’t just take analyst ratings at face value and dig into the “why.”

Learn to do your homework, and on time too. Company investor presentations and press releases can reveal their future plans without diving into 100-page reports. This helps you figure out if they’re actually growing, or just good at marketing.

Here’s a rule of thumb to take with you as you go: Stock picking is NOT indexing. Most stock pickers underperform passive index funds over the long term. But if you enjoy the research and want a hands-on approach, it can be both rewarding and educational.