Today,
many people get exposed to the big scandals and petty scams attributed to
people involved in stock
market and investment activities. For those who have no essential knowledge
of what the stock market is all about or know practically nothing about investing
in stocks and other financial assets, these people in the news may actually
appear like our typical celebrities who have loose morals and behave as if they
were immune to public or legal accountability.
But
in reality, people who play the stock market or invest in spurious ventures are
mavericks who had learned the tricks of the trade and found loopholes and ways
to manipulate or twist the system. If not, they have that uncanny ability to
use people and their money for their selfish ends.
Yet,
essentially, the stock market and investing in general can be a rather
straightforward process through which anyone who has the diligence to learn and
apply the requisite focus can attain financial security. Here are some commonly
applicable tips to follow:
1. Learn the basics of
the stock market
Stock
market investing requires a great deal of study to get the elementary knowledge
and principles of the industry, from understanding shares of stock, risk
tolerance and to the various rules that apply in the trade, such as 2% rule in
investment management and deciphering market fundamentals, which may sound easy
but is really one of the most challenging tasks in the trade.
This
task has been made easier with online information on stock market investment.
Certain websites even provide free interactive software and seminars on the
foundational aspects of the industry, including virtual investing exercises to
give you the actual feel of investing and making or losing money.
2. Work with a
professional manager
We
all need a coach or a mentor to be really good at anything. If you are not that
serious about investing in the stock market, you can be like the casual finance
student or novice housewife who invests some money in several shares of a
company’s stock and monitoring how the shares fare daily without the benefit of
a professional manager.
If
you have to spend some good money, hiring or consulting with a professional
manager will be a good investment in the long run.
3. Learn to recognize a
good broker from a bad one
Brokers
are people who trade in stocks, meaning they are responsible for selling and
buying stocks that are traded in the stock market. A professional manager will
help greatly in opening insights into this vital issue. But nothing will
prepare you better in real investing than dealing directly with brokers and
getting your hands really wet with catching live fish in the sea, so to speak.
4. Determine your risk
tolerance level
It
is vital to get advice from a professional finance manager as to what your risk
tolerance level is. Essentially, it is your capability to take risks based on
your particular financial standing: Internet
how much money you have, how much you intend to invest, which stocks will suit
your goals, how much you hope to gain and how much you are willing to lose in
case your investment fails.
It
takes experience to know exactly how safe or how risky it is to put your
hard-earned money in a particular portfolio. Again, having someone who has that
experience will help. But you have to be independently capable of measuring
your own vulnerability to risks and losses or, at least, with minimal
consultation. Like Warren Buffet, who has spent a big part of his entire life
studying the market, you need to start getting a real, working comprehension of
the stock market as early as now.
If
you feel the stock market is the way for you to go in terms of investing your
assets, then there is a way of achieving that goal without risking yourself so
much. But as the saying goes in the lottery game: He who wins never gives up;
and he who gives up never wins. Perseverance is a good quality to have in
aiming for financial security.
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