Most investors lost money in the stock market because of lack of information to wrong investment decision/strategy and they are usually over-confidence about the up swings in the market without realizing the risks involved and uncertainties ahead.
Below are some common tips hopefully may minimize your investment risks and get you the right tracks of stock investments.
1. Know your investment objectives in terms of short and long term goals. What kind of investors are you?
2. Invest within your mean, know where you can stand in terms of needs when market is turning against you. Be certain about your own risk appetite.
3. Make sure you have time to follow up with your share investment. Be well-informed.
4. Never put all eggs in one basket, diversify but not over-diversified your investment.
5. Read related market investment information from reliable sources.
6. Never buy or sell shares based on hot rumors or under pressure, this usually turn out to be a bad decision and get your fingers 'burned'. Never, never feel pressurized at any time by circumstances. Be cool!
7. Try to minimize your risks, as far and fast as possible. Don't take risk what you cannot afford to take.
8. Follow some guidelines, like the 5% rule, i.e. never risk more that 5% of your investment you cannot stomach to lose.
9. Always use cut or stop loss orders to protect your capital investment whenever possible.
Better lose minimum than a lot. Instruct your broker on cut or stop loss order when you are on long holiday vacation.
10. Lock-in your profit as soon as the deal gets profitable, this is especially when the shares went up significantly in a short period, like +30% within one week. Don't let greed overrule you. Likewise, don't sell in panic because of fear. Don't let fear overrule you also!
11. When you are unsure where the market is heading, it is better to stay put until situation get clearer.
12. Avoid speculative stocks, it's meant for the speculators.
13. Stay out with high P/E stocks and consistently 'in-the-black' stocks.
14. Always be well informed through reliable updated financial sources.
15. Watch updated financial market news to stay ahead with the trends of financial market.
16. When come to stock picks or recommended tips, know the fact and don't listen to market rumors. Any tips that come to you may be already too late even it's true.
17. Stock investment is not short-term like gambling, invest stocks in long-term, as there are likely greater chances of getting better returns (ROI) in long term if you focus on strong fundamental stocks like blue-chips.
18. Do your research. A well-researched and well-done valuation is timeless.
19. Change your broker if he/she consistently seem to be not able to provide you reliable information or good advice to help you make 'intelligent' decision.
20. Always do your home work before putting your hard-earned money into the investment world.
21. Learned from past mistakes and avoid repetition of same mistakes again.
22. When internet traffic get heavy or slow down heavily when doing internet trading, call your broker to place your bet as market data may change significantly.
23. Always set your price limits on fast-moving stocks when trading in share market .
24. Don't assumed that your order has been placed correctly. Double check and make sure you did it correctly. Correct it if need to.
25. Understand your margin agreement if you trade on margin, beware that your broker can sell your equities without giving a margin call.
26. Bernard Baruch once said that “If you want to make money, big money, buy that which is being thrown away.”
27. Be a contrarian. Sell or reduce your shares holding when market is over-optimistic about that stocks. Likewise, Buy or increase your shares holding when market is over-pessimistic about the stocks.
28. Beware of scams and internet stock fraud. Don't believe in get-rich-quick scheme.
29. Remember 'paper' gain is not a gain until it is in your wallet or pocket.
All the best!
Technorati Profile
No comments:
Post a Comment