Beginners’ Aproach to the Stock Market:

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Home Page > Finance > Investing > Beginners’ Aproach to the Stock Market:

Beginners’ Aproach to the Stock Market:

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Posted: Nov 26, 2008 |Comments: 0
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The stock market is a place of wealth multiplication. Whether you are a professional or a lay man, if the right principle is applied, you are sure to multiply wealth at the stock market. Some of the few things that one needs to have in mind in order to have a successful adventure in the stock market are listed below.

1) Make sure that you are absolutely in charge of your emotions. Never allow your emotions to control you. This is very important especially when your picks are down. Your emotions will be telling you to bail out because you are already recording losses; therefore you need to dispose your stocks quickly in order to reduce your loss. Instead of rushing to sell your stocks when there is a dip in price, first, get organized, check the company’s fundamentals. Check what caused the price dip. Go through their financials and know whether they are recording loss or having sound financial base, find out if they are facing any law suit that they may have to cough out some reasonable amount to settle or whether the dip is as a result of profit taking .If the later is the cause, then instead of offloading, you should rather take position by investing more because the price will definitely bounce back.

2) Be sure to do your due diligence before investing your money into any company’s shares. You do this by checking the company’s fundamentals and are sure that they are sound. The people who are controlling the affairs of a company matters a lot in determining the future of that company. Find out who they are. Observe the company’s charts chart and this will give you the true picture of the financials of the company, whether it is sound or in the red.

3) Device a means of getting the stocks you want to buy .A lot of website are out there claiming to be one guru or the other in stock picks. The truth is that all these are hypes. I need to let you know that it is a criminal offence for an insider to divulge any information about a company to an outsider. So you need to ask yourself, this guru that is promoting this company’s stock, what does he stand to gain? Is it that he has bought into the company after research or he is just trying to sell a dummy to me? Is he an insider in the company or who is he. In order to save yourself from hearth attack or hearth break as a result of losses incurred after buying a particular recommended stock, which might be huge, device your own means of doing research personally before buying.

4) The stock market is very volatile, so invest with care and wisdom. The price can go up today and come down tomorrow. So don’t invest all your money at a go. In your first buy, you may invest 50% of the funds you have budgeted for that equity and wait to see the movement, if it goes down and you are sure of the fundamentals, it is an opportunity to buy more and wait again. When there is another dip in the price, you may then invest the remaining capital and with this method, you will able to maximize profits.

5) Whether the stock you buy is making more money for you or you are loosing money, make sure that you have an exit strategy. It is possible for a stock that has gained 100% today to equally loose more than that tomorrow no matter the fundamentals. There are a lot of forces that determines the movement of the market. When there is a “shorting” in a particular stock, the price will definitely go down no matter the fundamentals. That is why you have to do your research very well before investing and have a predetermined time of exit. Don’t be greedy or you will loose all.

There are many other strategies but I will like to hear comments from you out there about the ones I have posted. Apply these strategies and let me know how it works for you and the difficulties you encountered.

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Eze ThankGod ik -
About the Author:

ThankGod Eze is an investment analyst with a passion for investing in stocks, real estates and other financial instruments. My investment goal is discover hidden but potential investment windows that guarantees maximum returns on invested funds. This site http://investmentpicks08.blogspot.com is a site that gives out free information on profitable investments.

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Article Tags:
stock market, beginners aproach, investing, stock investing, guide to investing

Beginners’ Aproach to the Stock Market:

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