Top 9 Basic Rules of Investing in Stocks
Changes on the market occur every day, but with these 9 rules it will be easier to keep ‘cool head’.
Financial experts agree that investment is one of the best way to get rich, or, if nothing else, make a little money on the side. If you are in a position that you can afford ‘playing’ with shares, experts warn that it is always a risk, but there are a few rules that can help you decide.
1. Invest money only if you will not need it for long period of time!
When it comes to investing, nothing is guaranteed. You can make money, or lose it. If you will need it in the near future or need access to large amounts of cash, do not invest.
“Invest money only if you will not have to touch it for few years. If you do not have such money, do not buy stocks,” said Andrew Tobias, a financial expert.
2. Do not put a time limit on your investment
People usually stay away from the market when the economy is in bad shape and return when things improve, explained Tobias. However, just when the market looks the worst, there may be the best opportunity for your investment.
In short, do not be alarmed if the market situation looks good, and do not panic if things look bad. The market is such that changes frequently, so be patient.
3. Invest from time to time, not all at once
Rather than buy a hundred shares when you are convinced that its value grow, invest part of your salary each month.
Financial experts advise that suddenly invest all your money, but over time slow load because it is the key to financial security.
4. Think long-term and do not touch your investments
Tobias said the tactic ‘buy and hold’, ie not the first sign of trouble to sell their shares.
“If you are not willing to hold stocks of your shares at least 10 years, do not even think about investing,” said Warren Buffett that shares of GEICO kept since 1950.
It is known well known saying “Do not put all your eggs in one basket”. The same goes for stock.
If you have invested money in only two or three companies, a lot more risk than you have money distributed to 20 or 30 companies.
6. Be calm
The investment is often quite emotional. Our choices tend to be driven by fear, greed or anxiety, rather than helping various reports with curves that fall.
Avoid checking your stock market reports every day or week. Market changes, the value of shares going up and down, but that does not mean that you need to respond.
7. Do not ‘drop’ on stocks in which all invest
Tobias explains that this is a typical trap. Many investors talk about specific stocks, and you feel the need to invest in them. However, only the testimony does not mean that you and shares to make a profit, even if it is a large and successful companies.
Try to find a ‘hidden gem’ shares and invest.
8. Do not bother subscribing to e-mails investors
These reports cost and throw you tempted to buy more shares. Do not drop for that trick, says Tobias.
There are plenty of free online sites that can answer all your questions and give you detailed reports on the state of the market.
9. Do not guess – Invest
Do not try to outsmart the market, it will not pass. Study, analyze and invest in the best opportunity.
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