Stock Market Investment Tips For New Investors

Thinking of making a killing in the stock market? Sure, you can make a fortune by investing in stocks, but bear in mind that you also undertake the risks that come with all investments. Here are some useful and practical investment tips if you are just starting out.

Tip 1: Do your due diligence. Due diligence is a phrase that is often used by investors. It means doing proper research. In other words, do not plunge into any risky investments before doing your homework. Read up about the stocks and take the time to understand the businesses that you are going to invest in. That will help minimize your risks.

Tip 2: Don’t just listen to news and rumors. It’s important to know what you are doing so that you won’t be wavered by groundless rumors. There are always news and rumors flying all over the place. If you are easily swayed, you may make a rash investment decision and that may cost you a fortune. This is also related to the first tip. If you can understand the businesses well, you know what to believe, and what not to believe. Trusting your gut alone is not enough. You must also be smart about your investment decisions.

Tip 3: Avoid speculative investments. Usually, new investors make the mistake of making risky speculative investments. They are out to make a quick buck and don’t have the patience to conduct proper research. In such cases, they are at risks of losing huge sums of money should the stocks take a bad turn.

Tip 4: Spread the risks. Don’t put all your eggs in one basket, especially if you know the stock you are investing in can be quite risky. It’s true that some stocks with higher risks may return higher profits. But what if the stock plummets? If your investment is spread out over a wide variety of stocks, you won’t be so badly affected.

Tip 5: Think of both short, mid and long term investments. Don’t just think of making quick money. Place some money in long term investments as well to spread out the risks. Wise investors usually invest only in businesses with sound fundamentals. They invest because they see real value in a Company’s products and services.

Tip 6: Don’t be blinded by greed. Avoid being emotional about investment decisions. If you find that you can’t think with a cool head, put off the investment. There will always be other opportunities arising at a later date.

Tip 7: Know when to cut loss. Sometimes, cutting loss may be your best decision. Don’t hold on to a stock that you know is going nowhere. Know when to cut loss when you invest in a stock. That way, you won’t be caught holding on to a stock when it hits rock bottom.

Stock Market Trading Tip – Achieve 40 Percent + Returns

Let’s face it folks making money on the stock market is not easy. If you take a look at the normal companies covered and pushed by the mainstream stock brokers you soon realize you need a significant investment to make decent money.

There is another way! It is a little more risky Here is a stock market trading tip for you – try investing in Penny Stocks. I am currently tracking 3 Penny Stock recommendations sent to me last month and 2 out of 3 are achieving 40%+ returns!

Here are stock market trading tips and facts you should know about Penny Stocks before you consider making an investment.

1. The value per share of a Penny Stock company is generally defined as having a face value of under $1. The company will also have a market capitalization of under $500M.

2. Penny Stocks have a lower number of shareholders and people trading the stock. These means a couple of important things for the potential investor. Firstly, the stock is much more volatile meaning the price of the stock and move rapidly either up or down. Secondly, trading volume spikes erratically – there is no smooth trading pattern so selling and buying share may be more difficult.

3. The volatile nature of the Penny Stock price gives the investor the opportunity to make significant profit. However, you also need to bear in mind that a Penny Stock is considered a very speculative investment.

4. Penny Stocks attract investors because of the low face value of the share. This means you can buy a large number of shares for a relatively lower investment which is attractive due to the increased investment risk. You need to purchase a decent volume of shares to maximize your returns.

5. The amount of information on Penny Stocks is much more limited compared to mainstream stocks. Investors usually rely on a combination of Penny Stock newsletters and word of mouth recommendations. You can also use a site like Yahoo! Finance to view company information and historical share price information. Be extremely wary of penny stocks pushed by spam email. I must receive at least 5 recommendations via spam email every day – ignore them!

Penny Stocks are a smart stock market trading tip where you can start small and make a decent return. One of the issues is getting quality stock pick recommendations which I solve below.

Stock Market Content Provider – Be Careful Who You Listen To

So what is the best stock market content provider to help you keep track of your investments? If you are going to be an active trader on the market, then the right provider is absolutely crucial to making some big money.

Many sites today provide stock market content; it isn’t hard to locate these. However, what information is really right, and what should you avoid?

With all the seeming conflicting information out there about the market, it’s easy to get hopelessly entangled with all the information. Here are some tips to help you avoid that.

First of all, the first bit of knowledge you need about the stock market is that it’s up and downswings are mainly caused by too many uneducated investors on the market. Here’s an example: many investors will often buy a stock purely on speculation that it will soon rise.

Often times, the reasons for their decision really have very little to do with the companies income statement at all. Most investors will simply make their buy or sell decision based purely on how the economy as a whole is decision, and the companies stock price; not how well they are doing financially, which is obviously the bottom line.

The great depression in the 1930′s was largely the result of the actions of these uneducated investors. Usually, they act together when buying or selling a stock, and chaos ensures.

Whenever an expert makes a recommendation to buy, or the stock price begins to rise, everybody jumps aboard the bandwagon, causing the stock price to rise even if there are no real profits behind the swing. This same principle applies if everybody sells at once; often times, a great company can be bought at a bargain price because of this herd mentality.

In other words, a stock price is often determined short term by factors that really have nothing to do with it’s overall profits. Long term, the market will tend to value a stock according to its’ actual net worth.

Therefore, the bottom line is, it is very difficult to make money wit short term investing, such as technical analyses (the analyzing of a companies stock charts and patterns). However, if you invest in a company for the long term based on its’ overall profits, you can generally be assured of cashing in.

In fact, when you do invest or the long run, you can often times go months without even looking at your investment, because the day to day wild swings in the market won’t affect you like it does most investors. When you base your investments solely on the profitability and long term prospects of the company itself (not the stock price) you will get very wealthy from your investments. Therefore, be very careful from which stock market content provider you take advice from.