Best Investment Strategies

Lack of proper knowledge is the key factor responsible for people achieving mediocre results or losing money in the stock market. It is therefore important to study the fundamental and technical variables for best investment strategies that are responsible for the increase and the decline in the prices of the stocks in order to invest wisely.

RULES FOR BEST INVESTMENT STRATEGIES:

1. Stock Tips do not translate into money – One of the most challenging problems for today’s investors is that there is too much free information, personal opinions and advice about the stock market. Not withstanding my stock advice of course! Only a specialist in stocks, who is engaged in studying the market or is a professional consultant, will have the intricate knowledge to help you make money. So don’t pay heed to rumors, information from dubious or unknown sources, or be influenced by friends and associates, especially those who have little knowledge about the stock market. It is important to restrict yourself to very few sources of relevant data, facts and time tested principles that have proven to be accurate and profitable over time. It is unbelievable how much erroneous information is out there about the stock market, how it works and how to succeed at it. You wouldn’t believe the volume of non-sense emails I receive on a weekly basis.

2. Follow strict guidelines – Many people don’t know if they should buy, sell or hold on to the stocks and the indecisiveness shows that they do not follow guidelines. It is therefore imperative to follow a set of strict principles or buy and sell rules to help create your best investment strategy principles. Stocknod Alerts is probably the best starting point for text book stock analysis.

3. Withdraw a portion of profits – From time to time it is important to withdraw a part of your profits. The prime reason for investing in the stock market is to make actual profits and not just make profits on paper.  For example, let’s assume you have bought stocks @ $1per share and now the price has gone up to $2 per share. Based on your market analysis, there is a good probability that the price will move up. However there is no harm if you sell a part of your stock and realize the profits from them.

4. Do not buy a stock because of good dividend- Do not be tempted by the lure of getting of getting good dividends. There are dubious companies who would push certain stocks by promising a good dividend.  You might find later that the dividends are not coming and the stock prices have gone down so badly that you have lost your capital. As a general rule the more a company pays in dividends, the weaker it may be. It may have to pay high interest rates to replenish funds paid out in form of dividends. Always remember, the major reason for buying a share is to increase the amount of money invested.
5. Learn to look at stocks objectively- One major reason as to why most people fail to make money in stocks is that their decision making process of buying stocks is guided by hope or personal opinions.  Too many times I have seen personal affinity for a stock (emotions) hinder a person’s logical side of emotions and cause investors to hang on to stocks far too long. Successful investors pay attention to the market and are guided by sound principles and time tested methods that yields results.  The best investment strategies take time and disciplined effort to make the right decision but in the end it’s worth every minute of your time.