We all know someone that knows someone that says you’d be mad not to invest in this stock as its going to moon or this is a sure win get in while you still can. They usually turn out to have a finger in the pie of the stock you invest in, and it goes down like a soufflé taken out of the oven too soon and you have just put your money into it!
In my experience there are two types of investors; the investor who follows his/her own strategy and the investor who makes trades on the basis of tips passed to them.
For latter group, they are overwhelmed with Nova Top 5’s, 2020 Investment Tips, Top Shares for 2020 and other tipsters who all seem to be full of wisdom. The tip-seeking investor thinks they can lie back and relax whilst golden tips flow towards them.
I get continuous requests to compile top five and top ten tips, explain where the dollar will go in 2020, and whether or not you should be in this or that stock. I have only one tip for you: never follow an analyst, trade fair expert or guru blindly. Always keep a clear mind and research first. I’ve summarised this for you in this the first of well, 10 commandments. (I know, I know I said don’t follow top ten lists!).
One of the disadvantages of following tips is that they offer only a very temporary solution for your investments. When I advise you today and my tip is correct, what are you going to do next week when I’m on holiday? You are once again facing the problem of wanting to invest money, but not knowing where or in to what to invest. Therefore, tips do not provide a basis for maintaining a consistent portfolio and strategy. There are also those who’ll offer you a subscription. My advice is to not use these unless you are aware of the quality of the service. Always do your homework.
You should never follow a tip without first doing some background research. Indeed, there are many people who are more knowledgeable about investing in stock markets than others, but do their forecasts always turn out the way they said they would? No, but if your tipster is right 63 percent of the time, you have a very valuable stock exchange companion. In addition, you’ll need to determine whether his vision is suitable to you. Check on what his choices are based on (technical, fundamental analysis etc.), and more importantly, whether you know and are familiar with the instruments he is suggesting you invest in. If these points are all positive and the tipster has a good and reliable track record, the ingredients for a potentially rewarding investment plan are all there.
What’s better is your own investment approach. Based on research and education. You dont rely on other people’s tips, but you have identified which markets you want follow, when a share meets your criteria, how you take action, and when you move to make the trade.
Although this is more time consuming, it is the most constructive and often rewarding way of investing.
Let’s face it, laziness is part of human nature and we would generally rather receive tips in our laps, rather than rolling up our sleeves and doing the work ourselves. In addition, it is good to be able to blame the so-called “experts” for disappointing investment results.
Ultimately, however, you are the one who determines whether or not you are successful in the stock markets.
If you have any questions or you would like to get in touch let me know via firstname.lastname@example.org
Trading in financial products always involves a risk. The value of your investment may go down as well as up. As a general rule, you should therefore only trade in financial products if you understand the products and the risks associated with them.