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Page 1: Avoid The Pitfalls Of The Market With These Stock Investing Tips

Avoid The Pitfalls Of The Market With These Stock InvestingTips

Many decisions must be made when investing in stocks. Do you go for mutual funds or individualstocks? Do you go solo or use a financial adviser with recommendations? Knowing the choices thatcome up and how to handle them, is just as necessary as analyzing stocks. Continue reading, if youwant to gain some enlightenment on the choices that are ahead.

Do not have unrealistic expectations about your investments. Every professional investor will tell youthat success almost never happens overnight, and when it does there are some very high risksinvolved. By knowing this, you can stay away from costly investment mistakes.

Once you have decided up on a stock, invest lightly, and don't put all of your money on one stock.Therefore, if your stock eventually starts to crater, you will not have risked all of your money.

Consider getting some good software that specializes in investment management. It really does notcost that much and it will help save you a ton of time trying to learn how to properly do things. Lookinto getting one that can help you with profits and losses and one for tracking prices.

Save money by trading online. Search online for firms that offer cheap stock trading. Quite often,their fees are much lower than traditional brokerage firms. A regular broker will usually charge ahigh commission, just to make a simple stock trade on your behalf. If possible, try to pay between $7and $10 per trade.

Don't invest too much into any company that you work for. Although buying stocks in youremployer's company may seem loyal, it does carry a significant risk. If your employer makes badmanagement decisions, both your investment and your paycheck will be in danger. With all that dulytaken into consideration, it must also be said that there may be a good bargain available if thecompany offers shares to its employees at a discounted rate.

Damaged stocks can work, but not damaged companies. When there is a downturn in the stock valueof a company, it is the ideal time to get a good price, but only do this if the downturn is temporary. Acompany that misses a crucial deadline due to something that can be easily fixed. like a materialshortage, may go through a temporary downturn, which can cause some investors to panic, causinga drop in price. Although, you have to keep in mind that companies which have had prior financialindiscretions have a higher chance of failure and possibly will not recover.

Keep tax rates in mind when purchasing stocks. When you purchase a share and you keep it formore than a period of one year, you are going to be taxed at the rate of a long term capital gain.However, if you sell the stock before the one year is finished, you are going to be taxed at the normaltax rate.

Keep your objective and time horizon in mind when choosing your stocks. If you have many years leftand are saving for a retirement decade away, invest aggressively. Look at small-cap growth stocks orrelated mutual funds. The percentage of your portfolio in the stock market should be as high as 80%,if this is your personal situation.

Stocks are only one part of an day trading for beginners overall investment strategy. You should alsokeep liquid assets in an emergency fund that you can withdraw from easily whenever the need

Page 2: Avoid The Pitfalls Of The Market With These Stock Investing Tips

arises. It is also possible that your investments may not perform as well as expected. As your wealthgrows, keep in mind that you will most likely need to also increase the amount held in youremergency fund.

Protect your money. Protect the profit that you have made through investments via a stop-loss order.This is placed with your broker telling him/her to sell when the stock goes below a certain price.People who are new to trading should set their stop-loss order for ten percent below the price theypaid, as this prevents last minute 'emotional' decision making.

Almost everyone has heard about someone who's made it big thorough invest, as well as someonewho has lost it all. This is a common occurrence. Although luck does help you make a lot of moneyvia investing, if you learn the basic principles and invest wisely, you increase your chances ofsuccess. Learn how to make wise investments that result in gains for you by following the advice youjust read.


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