Although some politicians etc. emphasize the performance of the stock market, rather than the bigger picture/scope of the broader economy, it seems that very few are adequately prepared and/or ready to handle the situation. main needs, to invest in stocks. It takes an open mind and the ability to focus, more on reality than emotions, and consider a variety of potentially relevant factors! Having been a Registered Representative and Principal of investment companies for a considerable period of time, I firmly believe that potential investors (especially in the stock market) should have a mindset that considers these variables and proceed, in a wiser and more focused manner. With that in mind, this article will attempt to briefly consider, examine, review and discuss 5 important considerations regarding investment management/investing in stocks.
1. Evaluate Fundamentals/Finances: Unfortunately, as with many things these days, many people rely too heavily on the analysis/opinions of others, instead of thoroughly examining the fundamentals of a particular corporation and what the audited financial statements mean and represent. Read books, take courses, and understand key terminology. Know how to read and understand budgets and financial statements. Why do analysts make certain predictions or analyses? Try to separate emotion from logic early on!
two. What to do when the price of a stock rises?: The price of a stock can go up, go up, remain stable, or go down. What should you do when the price of a particular stock goes up after you buy it? Ask yourself, if you didn’t already have it, would you buy it at the higher price? If the answer is yes, then buy additional shares! If not, sell what you own? If you’re not sure, then it makes sense to hold or sell some of these, to ensure you won’t lose money, if/when prices drop! Be objective!
3. The stock price remains stable!: Which strategy is logical and a smart approach if/when the price stays more or less the same as when you originally invested? Do not fall into the trap of becoming emotionally attached to a particular stock, but rather, after a period of time, consider again whether you were investing, again, Would you be putting your hard earned money into this corporation? If so, hold on and consider buying more shares, but if not, then sell your position!
Four. Stocks go down: What should you do, if it goes down, in price? Some panic and immediately sell or consider selling! While that might be smart, in some cases the smarter approach is, again, to ask yourself if you still believe in the particular company, and if you do, maybe you should invest in it. more actions!
5. Short, intermediate or long term: Consider whether you are looking primarily at short-term/immediate results, further, intermediate, and/or longer-term. Do you know and remember why you bought? Was your intent for growth, income, or a combination? Are your objectives/goals/expectations somewhat – realistic?
Before you invest, fully understand what the main considerations and your personal comfort zone may be! Always, consider this, as well as the potential risk/reward basis!