not lose money is the popular mantra in the world of stock investment.
It sounds very nice but no one can predict about the stock
investments. The investors confront with high risks involved while
investing and trading in stock market. Sometimes, even seasoned
investors suffer heavy loss in stock investment. However, the investor
can minimize the risk of loss and access great profits in stock
investments by avoiding the following general errors.
General Errors:
Never Buy Unknown Stocks: The investors are viable to owe a great risk
by buying share, which they do not understand. Never haste to buy
shares that brought, profit to the neighbor or colleagues. It is
ridiculous and unwise decision to do such things.
The investors need to understand the business structure and financial
record of the company prior to purchase of stocks. Even successful
companies with excellent business structure suffer from horrible
devaluation if any of its sectors fail.
De-emotionalize with Stocks: Emotional attachment with stocks can
suffer the stock investment. It tempts to hold the stock even when the
financial situation persuades to sell them off. No doubt, the
investors want to prove that they had made perfect decision in finding
the ideal company by spending enormous time and effort going through
the pages of corporate information and stock reports.
However, this sheer emotional attitude can bring heavy loss to the
investor. The stocks are to make money, not to marry them. If the
stocks are consistently low and there is no chance of improvement in
the move then it is appropriate to sell them even though it hurts.
Great Risk Involvement: No matter, the investors are willing to take
all risks but on the other hand, it is essential that they do not end
up without a penny. Their needs to be diversification while buying the
shares. In planning a stock portfolio, get shares from all dominant
sectors such as financial, building, oil, industry, and services.
This helps the investors to avoid their whole investment from going
down the drain in a case any one-sector collapse. It is best to limit
an investment up to 10 % of the investor's portfolio.
Eye on Turnover Overload: Stock market is not an impulsive business.
Buying and selling the stocks after a short period with small or no
gains helps the broker to get rich with commissions that they get
while trading. Investors take a note that each transaction comes with
contract costs and taxes.
By not taking these things seriously, the investors are viable to
swipe out by the costs accompanying the high turnover. In the long
run, there is a possibility to miss out the gains of the stock
investment.
Learn while Investing:
Understanding the potential errors in stock investment is a step ahead
for investors. There are numerous pitfalls, which the investors are
going to stumble up on while trading. The essential part of the stock
investment is to learn while moving along. No doubt, even billionaire
investors are bound to make mistakes.
Bring your gang together. Do your thing. Find your favourite Yahoo! Group.
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