Some Important Lessons to Know For Shares Investment

1. Don't let emotions mess you up. Market is not for the temperamental, sentimental and emotional one.

2. Understand the high risks involved in stock market investment. When market is in the bull run or over-heating, take the profits if one shares are shooting high without good reasons, don't let greed rules your mind. Otherwise, greed may turn into grief because one will never know of a sudden bad news may come unexpectedly from nowhere even during the good times and this can wipe off your 'paper gains' overnight.

When your gut feeling tells you the signs of beginning of bear run, be prepared to cut losses early if necessary. Whatever rules you may applied to suit your 'comfort' level, be it 5%, 8% or10%. If a stock falls below your purchase price level, be prepared to 'stomach the pains' and cut-loss. Better to cut small losses than to risk a possible larger losses later on. Market has no mercy to stocks falling even to blue-chips when bad news surfaced.

3. Pay attention to fundamental analysis of company earnings and future growth potential or direction. Understand the market trends related to their business. What is favorable business model yesterday may not be today. The reverse is also true.

4. Look for 'Relative Strength' of a company. Who are their competitors? Their strengths ,weaknesses and growth opportunities. Their consistently good track records...

5. Understand top management leadership capabilities from their past track records. Are their performance consistent or erratics?

6. Never invest shares consistently traded in low volume. You may find it difficult to unload your shares holding when market is heading downward or worst, market crashed.

7. Analyze different technical chart patterns so as to minimize risks involved when making decision to buy or sell shares. Look for patterns like "double top", “double bottom”, “flat base”, “cup with the handle”... If in doubt, consult your 'reliable' brokers.

8. Growth vs.Value Investing. Look for listed-companies consistently reporting good earnings and sales growth from their track records, or consider buy stocks with a low P/E ratio and strong fundamentals. Stay out of penny stocks if possible.

9. Don’t try to short-sell the market. Don't try to time the market. Even experts made mistakes sometimes. Don't get caught with your own pant down. Be cautious not careless.

10. Stay right mix for your shares portfolio. Don't over diversified and lose your focus. Don't try to put too many eggs in your baskets, focus only a few good potential growing and strong fundamental stocks like blue-chips.

All the best!

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