A lot of investors lose their money for different reasons but to stay on top of the market you have to be a knowledge investor. The question you will ask me is that who is a knowledge investor? A knowledge investor is someone who understands the stock market. He is willing to read books and articles on investment, he goes for investment seminars at least twice in a year, he takes into consideration the news and the events particular to the stock exchange. The reason investors lose their money could be as follows;
Greed
If you buy a stock for $5 an your goal is capital appreciation and you set your exit strategy for 100% returns on investment, then you have to discipline yourself to sell the stocks at $10. Always act on your exit strategy if you want to be an intra day trader
Lack of investigation;
Before buying a stock always investigate about the stock. Find out the last time they release their earnings result, the current price compared to the 52 weeks high, management, product creation if there is any, the latest news and reports coming from the company, the quarterly result etc.
Buy stocks during the bearish period;
The best time to buy stocks is when prices are low and current global financial crises are an opportunities to buy stocks for long-term purposes. The reason why the bearish period presents itself as an opportunity to buy is because most of the listed companies are selling far below their 52weeks high.
Lastly hold on to stocks during the bearish period don't sell your stock until the bullish period returns to the market.
No comments:
Post a Comment