To be a successful stock investor, there are a few rules and guidelines that one needs to follow.
Peter Lynch, one of the greatest and most successful investors of all time had the following to say about market stocks tips:
“All the tips I’ve gotten on takeovers have been wrong.”
“Separate all stock tips from the tipper, even if the tipper is very smart, very rich, and his or her last tip went up.”
“Some stock tips, especially from an expert in the field, may turn out to be quite valuable. However, people in the paper industry normally give out tips on drug stocks, and people in the health care field never run out of tips on the coming takeovers in the paper industry.”
If Peter Lynch, with his high profile connections, has never received accurate stock advice on a takeover, why should you think your brother in-law has some?
Further, if you are looking for market stocks tips you are being a bit lazy. It means you do not want to do your own research – and you should hire an investment professional who can provide you with stock advice. If this investment professional trades or offers quick tips instead of well-informed stock strategies you should move on and find another advisor. Some market stocks tips can also get you in trouble as it could be material non-public information, also known as inside information.
There are numerous stock strategies, also known as portfolio strategies, that one can follow. When you pick a stocks strategy that fits your investment objectives, you must maintain the course and stick to that strategy.
Fundamental Analysis is a stock strategy that attempts to determine a security’s intrinsic value by focusing on factors that affect a company’s actual business and its future prospects such as sales and revenue growth as well as profit metrics. There are multiple ways that this can be done, including Top down Investing, Bottom-up Investing, Growth Investors and Value Investors.
Technical analysis of stocks is a type of stocks strategy that uses chart patterns and indicators like volume and prices to determine the direction of stocks. There are many types of technical stock analysis including Momentum Investing, Elliott Wave Theory and Intermarket Analysis.
Combining fundamental analysis with technical analysis of stocks is essential to know what to buy and when, as well as when to sell.
Learning to take small losses while not being scared to let winners continue on is key to making money in stocks.
If you fall in love with a stock story it becomes harder to sell.
Like everything in life, it is better to learn from your mistakes than ignore them.
Don’t worry about trying to buy low and sell high. Often low-priced stocks are priced low for a reason.
Having a plan on when to sell is as important as knowing when to buy.
Studying history of the stocks you own and the stock market can help you identify repetitive patterns amongst asset classes and economic cycles.
After determining the trend, pick superior stocks in leading sectors. Going against the trend is a difficult way to outperform.
No need to overcomplicate things with too many indicators and complex stocks strategies.
Stocks that go down usually go down for a reason. Buying more is putting more money into a loser.
Use stocks tools for risk management, such as stop losses, to protect gains.
Often stocks will retest their initial buy point occasionally on large volume for one or two days. Don’t let this scare you into selling. Selling because you get scared is a poor stocks strategy.
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