Principles Of Investments In The Stock Market - Part 2
This the second part of the series on the discussion of principles of investment in the stock market. This is the continuation of a four part series. We previously discussed the first principle. This involves realizing that the stock market is just another investment vehicle. You must realize that there are other vehicles of investments before you decide to invest in the stock market. In this article the next two principles will be discussed. Please visit my blog if you want to view the entire article.
2.) You must know that investing in the stock market is a roller coaster ride - One of the advantages of the stock market is that there are times when it really climbs up then really big profits are made. However when it really goes down then really big losses are also made.
The general strategy is to sell when the market is up and to buy when the market goes down. About two years ago when I started investing, the Philippine Stock exchange index was only about 2000 + points. I've seen it go up to 2500 points and slide back to the 2000 level in the middle of 2006. It slowly and steadily climbed up to the 3200 level in the 1st quarter of 2007 and dropped in a very short period of time during the last days of the 1st quarter of 2007. It climbed steadily to a high of 3700+ points in July 2007 but slid back below 3000 points a month after. By October 2007 it climbed steadily to its highest at 3800+ points. A month after it dropped to 3600+ points.
There is only one conclusion that can be drawn here, that is it is really a roller coaster ride. Huge Profits and losses are made during those times that the market is up or down.
3.) You should determine what type of investor you are - Are you a long term investor or a short term investor? This is a very important question that each serious new investor should consider. This affects whether you should buy or sell a certain stock.
Long term investors hold their stocks for 5 to 10 years. This means that that they believe in the company that you are investing in. This also means that and that they have extra money for other things because they can afford to put in their money for a long period of time.
The advantages of long term investing is that they do not have to worry about the cumbersome day to day technical analysis that has to be monitored. There is no problem if the stock is held for a long period of time because long term investors believe in the fundamentals of the company. On the other hand a short term investor cashes in within a months time to 6 months time. If you are a short term investor, one thing that has to be considered is the monitoring of the day to day activities of the market.
Like the long term investor, you have to make sure that you can afford to put in your money for a long period of time but not as long as the long term investor. The reason for such is because during the short period wherein you plan to invest and pull out your stocks, you may incur losses during that time so you may decide to wait a little longer.
Most of the stocks I hold are considered as medium and long term investments. This is because when I started out I determined to be more of a long term investor. There are stocks that I hold that I consider as short term investments. However majority of the stocks that I hold are considered as medium to long term investments. - 23162
2.) You must know that investing in the stock market is a roller coaster ride - One of the advantages of the stock market is that there are times when it really climbs up then really big profits are made. However when it really goes down then really big losses are also made.
The general strategy is to sell when the market is up and to buy when the market goes down. About two years ago when I started investing, the Philippine Stock exchange index was only about 2000 + points. I've seen it go up to 2500 points and slide back to the 2000 level in the middle of 2006. It slowly and steadily climbed up to the 3200 level in the 1st quarter of 2007 and dropped in a very short period of time during the last days of the 1st quarter of 2007. It climbed steadily to a high of 3700+ points in July 2007 but slid back below 3000 points a month after. By October 2007 it climbed steadily to its highest at 3800+ points. A month after it dropped to 3600+ points.
There is only one conclusion that can be drawn here, that is it is really a roller coaster ride. Huge Profits and losses are made during those times that the market is up or down.
3.) You should determine what type of investor you are - Are you a long term investor or a short term investor? This is a very important question that each serious new investor should consider. This affects whether you should buy or sell a certain stock.
Long term investors hold their stocks for 5 to 10 years. This means that that they believe in the company that you are investing in. This also means that and that they have extra money for other things because they can afford to put in their money for a long period of time.
The advantages of long term investing is that they do not have to worry about the cumbersome day to day technical analysis that has to be monitored. There is no problem if the stock is held for a long period of time because long term investors believe in the fundamentals of the company. On the other hand a short term investor cashes in within a months time to 6 months time. If you are a short term investor, one thing that has to be considered is the monitoring of the day to day activities of the market.
Like the long term investor, you have to make sure that you can afford to put in your money for a long period of time but not as long as the long term investor. The reason for such is because during the short period wherein you plan to invest and pull out your stocks, you may incur losses during that time so you may decide to wait a little longer.
Most of the stocks I hold are considered as medium and long term investments. This is because when I started out I determined to be more of a long term investor. There are stocks that I hold that I consider as short term investments. However majority of the stocks that I hold are considered as medium to long term investments. - 23162
About the Author:
Would you want to know more about investment strategies ? Visit the blog of Zigfred Diaz where he blogs about several interesting topics such as investments, money management, business, making money online and Stock market investing
posted by X - Men @ 12:35 AM
0 Comments
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home