5 Tips To Lose Money in The Stock Market
- By D.J Raymond
- Published 11/2/2008
I Have Got A Hot Stock Tip Just For You
We have all experienced the hot stock tip. It happens anywhere at anytime and without provocation. Someone you know tells you about a stock they have purchased and it is poised to double in price over the nest few days. Your ears perk up because after all, it sounds like easy money. The fact is making money in the stock market is not easy. If someone tries to convince you it is, run as hard as you can. The other direction!
It Is A Big Company They Must Be Making Money
Big companies go out of business just like small companies and individuals. Bankruptcy courts are full of them. Because a company is large does not mean investing is safe and secure. Remind yourself of Enron whenever the urge to use this logic strikes you when investing in stocks.
Hello I Am Mr. Stock Picker, Do You Have a Few Minutes
It is amazing how many investors will trust a total stranger with investment advice. You will be approached by strangers seeking to convince you to buy stocks and invest Usually your best interest are not on their minds. Remember stockbrokers make money buy taking orders, either buying or selling. Make sure you know whom you are dealing with and avoid stranger with a good song and dance
Buying Stocks When They Are Down In Price
Bottom fishing for stocks that have reached new lows in hopes that they will recover is a hopeless proposition. Generally stocks go lower because there is a reason.. A simple rule of thumb, most stocks that reach new lows go lower. Most stocks that reach new highs go higher. That seems rather simple does it not?
Buying Penny Stocks, You Can Buy More Shares
This is a similar strategy to bottom feeding. Why not buy 10,0000 shares of a stock, after all, its only .08 cents a share. You can double you money easily right? Not so fast. Same principle penny stocks are cheap because they are worth, well pennies. Nothing will take the wind out of your investing sails like a 30 for 1 reverse split. Investing in peeny stocks is highly speculative. It best to leave those for the speculators.
You can make money in the stock market. However it requires and education in how stocks work and what drives markets. Take the time to research, read and learn all you can. It will be worth your effort or you can follow the plan above. The choice is yours
D.J. Raymond writes about investing and personal finance . Beginner Investors can learn more, visit the Beginners Investing Guide
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