May 12, 2020

Investor Tips on Stock Market Risks

 As a rookie investor there are several investment rules that you are required to have before investing in stocks. The stock market is a market controlled by the techno savvy stock market investors who possess both an inside and outside knowledge about its operations. As a rookie investor the stock market can be a very daunting and risky place to transact.

The following tips should be sufficient to start one on the path to investing:

There is a misconception about certain stocks that are considered to be hot. These types of stocks should not be considered if the source of the information is not clear or worse unknown. Many a person put in their time and energy in the promotion of certain equities. This is a gimmick aimed at promoting and marketing stocks that they have invested in. When the marketing gimmick works many people invest in the said stocks, which of course results in increase in their prices. They sell it off for a profit and immediately afterwards the stock prices crash and they are off to promoting the next set of equities.

It’s very important for one to rely on their intuition and brain power- ‘rely on your own intuition’. Reliance on advice from other persons may be disastrous, as the old adage goes take plenty of advice but the decisions should be made by oneself’. Fact finding about the companies should be a continuous exercise. Dig into their financial statements, while press releases that have little information or gutter press releases should be completely ignored. Reports that hype a company situation more often than not are misleading.

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Money used to invest should really be money that you can afford to lose. A very basic point, many a person misses it; disposable money should be the only money that one should use to invest. Everyone embarks on investment with the idea of reaping big profits, but in reality this is not how the market works, most especially if you are new to investing in the stock exchange. Knowledge on stock market risks is very important to avoid throwing away your hard earned cash.

It’s very important to understand that the above investment tips are for rookie investors, beginners. When you get into the real action, the tips are not really required anymore; however, if you are a rookie you MUST follow them. They are your safe landing.

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But then again, nothing comes free. Everything has a price. You will have to lose some money, make some bad decisions and then only will you really understand the market. You cannot understand the market by just looking at it from far away. By following these rules, you will hopefully not lose too much.

Everything comes at price since really nothing is for free in this world. You are definitely going to lose some money, make some bad investment decisions. However, all these are obstacles that make you learn and get to understand the market. With the investment tips on hand, you are probably at an advantage of not losing a lot.

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