Mathematically it has been proven that if people diversify their money, they will most likely end up with positive results as opposed to lumping all their cash into a single investment. This is why most people wont just purchase one company, they will purchase a few to diversify their investments.
My advice to all new investors is always the same. The stock market is enormous and there is tons of literally stupid data and discussions being tossed around.
The market is always subject to people who will make very quick irrational decisions because of a chaotic effect taking place. It’s very important for all new investors to spend a lot of time reviewing specific companies in the stock market and to track their performance.
In my case, I tracked the market for close to 6 months before I even engaged in a trade. I needed to be absolutely certain about my strategy and even then, I was slightly unsure. The trick is for a person to make the decision, are they going to be an investor or a trader. The primary difference between investing and trading is really how often one makes trading decisions.
Traders look for short term growth and make very quick decisions every single day the market is open. An investor spends more time thinking about how his/her investments will accrue in value over a set period of time, usually longer than 3 months but that time amount is not set in stone.
To sum up, investing requires research, a lot of time commitment spent on reviewing historical data, and making decisions. The most important rule is to learn discipline. Many traders use numbers like +/- 5% on stocks and +/- 10% on options. As a trader, you need to stick to these numbers. Otherwise you can get killed.