Tips For Investors

March 07, 2012

Investing in the stock market is often viewed as some form of mystical alchemy, but the reality is it’s an objective enterprise made up of constantly shifting data. The prudent investor will approach the stock market as he or she would any other financial project, with forethought. Like finding the highest CD rates out there, discovering the right stock for your money is a time-sensitive proposition that requires discipline and patience. Here are a few stable tips that should help you get started:

Look for undervalued stocks. The most successful investors look for stocks that haven’t been realized yet and invest before they become popular. This requires due diligence and hours of research, but the payoff will be immense. Highly valued stock, though unlikely to lose you money, is going to grow extremely slowly and will earn you very little revenue. Promising stocks from companies that are either new to the scene or revamping their operations are the way to go.

Buy stocks from companies you understand. Understanding the process of a business’s services or the nature of its products is an integral part of knowing when to buy and sell. If you don’t understand the process and fundamentals of who you’re investing in, it will be difficult to anticipate market trends and changes in consumer confidence, which are all-important in investing.

Try to anticipate the next bull market. This is similar to looking for undervalued stock except this time you’re applying that research and due diligence to the market as a whole. Look for low interest rates and a rise in industrial production. When you see those bellwether signs, it generally means the economic conditions are ripe for a strong market and consumer spending. During a bull market you should try to be heavily invested in retailers, media companies, and leisure companies of many varieties. Also look into technology companies during a bull market, as venture capitalists and investors are feeling chipper. Find healthy computer chip manufacturers, software companies, information technology companies, etc.

Look at your investments as long term propositions. If you’re investing with the expectation of making a quick buck, you will probably be disappointed. Investing is like a game of chess: it takes a while and it’s critical that you plan several moves in advance.

View your investments as assets, not money. Similar in philosophy to the last tip, investing should be viewed as a way to add value to your overall financial portfolio. Don’t expect to use your investments as an ATM machine. Use it to fund things like retirement savings and college funds.

Investing in the stock market has earned many people vast fortunes and will continue to do so. If you do the legwork and approach it in the right way, investing in stocks can help you to prepare for your own financial future.  

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Jose L. Aguilar- SharkInvestor.com Author

Being able to Invest & Trade on your own is the most amazing road to financial independence & optional retirement. I was very fortunate to have amazing mentors and read many amazing authors, I hope you enjoy my articles & books suggestions which are made with the intent to share my experiences as simple as possible.

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By Jose L. Aguilar

Being able to Invest & Trade on your own is the most amazing road to financial independence & optional retirement. I was very fortunate to have amazing mentors and read many amazing authors, I hope you enjoy my articles & books suggestions which are made with the intent to share my experiences as simple as possible.

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2 Comments

  1. Dillon Cartin

    Bad idea.This is how you make money trading (anything). 1. Knowledge/skill 2. Inside information (illegal) and 3. LuckYou probably need at least two of those to be successul. How many have you got?References :

    Reply
  2. Johann

    @ Dillon

    Luck is probably the best way to succeed but that’s something you don’t have control over.

    The one tip that is really great is to look for long term investments. Quite a bit of knowledge and skills are needed to do this but the rewards are tremendous

    Reply

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