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If you are an investor, there are many strategies that can be employed when venturing into stocks investment. To start with, investors should learn to analyze market trends, do extensive research of the companies and industries that they are interested to invest in, and purchase shares at just the right time. More often than not, a stable company makes known to the public its profits and its standing in the business or industry, at a particular time of the year. Anticipating positive results for these particular companies, prices of shares are expected to go up prior to any such announcements, and the potential buyer should refrain from making any purchases or stocks investments at this time.
In other words, when trading in shares, market timing is everything. Below are some strategies that may serve as useful guide for those on their way to taking on stocks investment.
First, develop a diversified portfolio that meets an acceptable level of risk tolerance. Even the most conservative stocks investment portfolios are not risk-free. Try to achieve a balance of high-quality bonds and treasury bills, with the more risky financial instruments.
Investing in the stock market can prove to be intimidating for the neophyte investor. When unsure of how to proceed, always refer to financial advisors and stock market analysts for some guidance before going ahead with any transaction or stock purchase.
The stocks investment motto has always been Buy Low and Sell High, referring to the prices of company shares. Basic mathematics will tell us that buying low and selling high would give us the maximum return for our investment.
As a stocks investor, always update yourself with added knowledge about your chosen company: how it is doing in terms of profits and in comparison to the competition, its market capitalization, and any future opportunities open to it. Arming yourself with company knowledge will broaden your horizon on where to invest, and at the same time alert you to the possibility of stock prices going down due to negative circumstances.
It is also important to look at things from a long term perspective. Before putting one’s money in a company, an investor should assess his resources and set limits as to how much he should invest, when to hold on to these shares, and when to sell.
Plan and execute a good exit strategy. When an investor has made a good return on shares of stocks of a certain company, then it is usually recommended that you cash in on these shares and move on to another company’s stocks, especially one that you have been studying and eyeing on to give you higher gains.
Set a Stop Loss Limit. When a company stock is not doing well, there is just so much that you can take. Predetermine the amount of loss that you are willing or are able to absorb. You should be able to just sell out or exit when the market level nears this tolerance limit or worse, crosses it.
Like any business venture, the objective of stocks investment is to maximize potential returns yet at the same time minimizing risks. There are many strategies that one can do this, the most important of which are doing one’s homework in research investment, knowing when to buy and when to sell, and diversifying one’s portfolio.
By: Nir Dotan
In other words, when trading in shares, market timing is everything. Below are some strategies that may serve as useful guide for those on their way to taking on stocks investment.
First, develop a diversified portfolio that meets an acceptable level of risk tolerance. Even the most conservative stocks investment portfolios are not risk-free. Try to achieve a balance of high-quality bonds and treasury bills, with the more risky financial instruments.
Investing in the stock market can prove to be intimidating for the neophyte investor. When unsure of how to proceed, always refer to financial advisors and stock market analysts for some guidance before going ahead with any transaction or stock purchase.
The stocks investment motto has always been Buy Low and Sell High, referring to the prices of company shares. Basic mathematics will tell us that buying low and selling high would give us the maximum return for our investment.
As a stocks investor, always update yourself with added knowledge about your chosen company: how it is doing in terms of profits and in comparison to the competition, its market capitalization, and any future opportunities open to it. Arming yourself with company knowledge will broaden your horizon on where to invest, and at the same time alert you to the possibility of stock prices going down due to negative circumstances.
It is also important to look at things from a long term perspective. Before putting one’s money in a company, an investor should assess his resources and set limits as to how much he should invest, when to hold on to these shares, and when to sell.
Plan and execute a good exit strategy. When an investor has made a good return on shares of stocks of a certain company, then it is usually recommended that you cash in on these shares and move on to another company’s stocks, especially one that you have been studying and eyeing on to give you higher gains.
Set a Stop Loss Limit. When a company stock is not doing well, there is just so much that you can take. Predetermine the amount of loss that you are willing or are able to absorb. You should be able to just sell out or exit when the market level nears this tolerance limit or worse, crosses it.
Like any business venture, the objective of stocks investment is to maximize potential returns yet at the same time minimizing risks. There are many strategies that one can do this, the most important of which are doing one’s homework in research investment, knowing when to buy and when to sell, and diversifying one’s portfolio.
By: Nir Dotan