Stock Investor Tips

1. Understand the Stock Market
The more you understand, the more you'll know what to do with your investment.
Advice...

Read books that can give you the big picture on how the stock market works. Then browse websites that offer stock trading simulation for you to practice what you've learned. As much as possible, familiar yourself with all the terms and systems used in stock and other securities trading.

2. Find out all You can about your Broker
It is absolutely vital that you completely trust your broker and have faith in the securities firm that the dealer represents.
Advice...
Your trading in the stock market will be carried out through a stock brokerage firm which is a member of the stock exchange. Make sure you choose a reputable and reliable broker.

3. Set long-term Goals
Long-term investments to yield better returns over time than short-term ones.
Advice...
The stock market is designed for both long and short-term investments. However, while occasional market crashes can wipe out the short-term investors, those who set their sights long-term can expect to recover and grow the value of their investments over time.


4. Invest only a Portion of Your Earnings
Investments have an upside as well as downside potential. Always remember that you have risk of loosing that investment.
Advice...
There is no such thing as a risk-free investment. Determine how much money you and your family will absolutely need for living expenditure, decide how much you want to save, and then only use the remaining money that you have for your stock investments.


5. Choose the Company You Invest in Wisely
Get informed knowledge and advice on the companies that you decide to invest in.
Advice...You do not have to be a financial analyst to figure out the balance sheet of a company, but it will help if you have rudimentary(inside and outside) knowledge on how if not, go to someone who does. Understanding how companies perform and their future prospects is crucial to stock investing.


6. Diversify Your Holdings
No one should invest all their money in just one industry or one asset category.
Advice...
In the stock market, as in the real world, different industries cannot be expectedto shine at the same time. At any given year, some industries will perform well, others not so well. By deversifying our holdings, we reduce the risk of being exposed to the poor performance of any one industry or asset category.


7. Avoid Market Timing
There is no full proof system to predict when is the right time to buy or sell stocks.
Advice...
Most successful investors do not watch the market constantly in order to buy 'low' and sell 'high'. Nor do they perpetually move in and out of different stocks. If there is indeed a full-proof system of predicting where the market will go, wouldn't you think that everyone will be rich from the stock market by now?


8. Prepare Yourself for Good and Bad times
Even the Best Managed companies can have their bad days.
Advice...Even after you have taken every precaution, and followed the advice of every expert in the market, there will be times when you will lose money on your trade. You simply cannot win or profitable on your investments all the time. So be prepared for the bad times and don't let emotions get the best of you.


9. Remain Focused on Your Goals
Remember your long-term plan and never lose the focus of your goals over temporary events.
Advice...
Unfolding events, however disastrous, may just be temporary in nature. In other words, stock markets have always recovered from crashes, no matter how large they are. So, unless you are in the market for the short term, hold on to your investments and give a chance for the market to recover.


10. Review Your Needs from time to time
We should review our investment strategies from time to time, to adjust to hanging needs or new opportunities.
Advice...
Sometimes our financial needs can change from time to time. Or new investment opportunities may arise. Good investments often require flexibility even as we remain focused on our long-term goals.


11. Beware of investment scams
Don't be taken by investment offers which appear highly appealing, but which you know little about.
Advice...
The stock market has its share of scams and fraudulent activities. Even when the stock market is not to blame, there are companies that are driven to ground by bad management or embezzlement. All these can harm your investments. So, do your due diligence and never act without sound knowledge.


12. Continue to Learn as You go
Investing in the stock market can be a lifetime learning. If you want to save money, learn from the mistakes of others.
Advice...
No matter how knowledgeable you may be about the market, it always pays to seek for and listen to professional advice. Remember that if you make unwise decisions in stock investment, you could end up losing some or most your investments.


Source : www.rti.com