Archive for

2 Stock Market Tips That Can Help You Avoid Losing Your Hard Earned Money

The following article is going to provide you with two tips that you can utilize to maximize the potential return you might experience as a result of buying stocks. Needless to say, it always makes sense to consult with a professional investment advisor before making any investment decision — and you should always be prepared to lose all the money you are investing.

With that said, the very first thing you should always do is make sure that the company who shares your buying is actually making money. That may sound like a laughable thing to say, who in the right mind would buy shares in a company that is losing money? Unfortunately, many people oftentimes take unnecessary risks by wagering that a company that is losing money today may start making money in the future. However, unless you have a clear understanding of what’s going on, it is more likely that the company will continue to lose money and that your investment in this stock will lose value over time.

The second thing you need to do is have a well-established exit strategy. In other words, it’s not enough to just buy a stock and hope it goes up. You should have a clearly articulated idea of what price the stock needs to reach before you will consider selling it. The reason why this is so important and so that you have a very clear framework and so that you don’t find yourself feeling overwhelmed and confused about when you should sell the stock.

While following this advice is not guaranteed to keep you completely out of the woods, it will go a long way towards making sure that you don’t find yourself wondering why you lost so much money when you purchased a particular stock.

How People Lose Money In Stock Markets?

Not everyone reads books or articles on the internet to gain knowledge on financial markets, prevailing economic conditions and various socio-economic events that matter. While some people lose money by investing in a euphoric state and still many others fall for common notions. Prior knowledge of pitfalls in stock trading is extremely important for every beginner. Failures not only translate into the loss of money in stock trading but also cause the loss of confidence in the market; sometimes for a lifetime! A beginner should put his/her best foot forward after studying the basic essentials of responsible and informed stock trading.

To know more on how people lose money in stock markets, go through the list below.

Herd mentality: Following the crowd mentality in any financial market in the world can lead an investor to big losses. It is one of the most common reasons why novice investors lose money in stock markets. Sometimes, novice investors can lose big sums of money overnight simply due to the reason that they follow a popular conception.

Making investments on the basis of tips: There are countless self-proclaimed gurus in all financial markets. Checking out their tips along with an analysis of fundamental market forces can help but you must not go by popular stock market tips and rumors alone. Prior research is important no matter how small or big a sum you plan to invest. On some occasions, these gurus do come up with excellent financial analysis of the market. However, it may or may not happen with their next prediction or analysis.

Making investments in penny stocks: Several novice and sometimes experienced investors end up as bankrupts after investing in penny stocks.

Failure to track a company’s financial details: Many investors are not even aware of quarterly results of a company they invest their money in. An investor should stay abreast with all the latest news concerning a company’s financial condition.

Failure to understand the prevailing marketing trend in a sector: Some folks continue to invest in the same sector even when it is showing clear signs of downturn. For example, if real estate markets in a country are going through a real rough phase, there is no reason why you should stick to them no matter how profitable they have been in the past.

Involve sentiments in investment decisions: This is no doubt the best way to lose money in any financial market! Some investors do not exit even at really high valuations. A serious investor should always take rational decisions to ensure long term success.

Continuous speculation: Prolonged stock market speculation, doing day trading all the times or investing in derivatives has also lead a large number of investors to losses.

Before making an investment in the stock market, it is advisable to understand a company’s actual value and growth prospects. As you continue to learn, you can also analyze the strength of balance sheet, share pledging, nature of management, socio-economic factors and several important parameters affecting the final outcome of an investment decision to ensure maximum profits.

Stock Market Strategies For Beginner Investing

Stock market investing tips are a dime a dozen. And as a stock market strategy is easily one of the more common and diverse offerings you will come across. So many stock market strategies exist because each and every investor purchases stock shares using a strategy that works for them as an individual. Investment tips are merely someone telling others what stock shares appear to work for their own stock market strategy. There is no other way to find a stock market strategy than to discover your own.

Every so called ‘guru’ will give you investing tips, but do the tips work more often than they do not? Probably not, and this is because the stock market strategies of the ‘gurus’ do not include the most important part: timing.

When it comes to stock market strategies, timing is simply knowing when to buy and when to sell to gain the most economically appeasing results. If your learning how to invest stocks, then understand that timing is really the most important part. Why? Because every stock market strategy revolves around the old ‘buy low sell high’ ideology.

In reality, most of the typical stock market strategies are nothing more than a way to determine when the low price and the high price occur (opposite if shorting). When you can start to buy stock shares when YOU feel the time is right, when it reaches a point that it will rebound from, then you have in your hands one part of the stock market puzzle.

You must learn to do buy when it is comfortable for you so you do not blindly buy stock shares simply because another person tells you to do so. Blind opinions are inherently risky since they are human conceived and therefore prone to inaccuracy. Probability of error is the reason why you should never let investment tips guide your finances. Take investing tips to be simply a suggestion which can be used as a lead to funnel further due diligence toward.

Once you figure out how you like to buy the lows, then you only have to learn when to sell. The only investing tip I would ever back, is to not get greedy. When I get the feeling to walk away, I do. Period. So what if I miss out on extra gains? A gain is a gain. I would much rather have a minuscule gain than a loss, any day.

As long as you can identify when you feel it is right to buy, and you can identify when it is you are comfortable taking a gain or loss, then congratulation, you have your very own personal stock market strategy for investing. Stick to this strategy and adjust as you go. This is exactly what all professional investors do when they spit out investing tips. If any one person had a reliable or repeatable system that earned a consistent ROI, then everyone would be using it. No system like that exists because every person is unique and requires their own tailor made stock market strategies.

Now do yourself solid and recognized that investment tips are just a hint at an investment you may want to perform due diligence on while using your own systems to develop stock market strategies that work for those beginning investing