Shares and Stocks 101 Review Chapter 17-18
STOCK MARKET INVESTING TIPS
What should you do to be successful in the stock market, may be the following tips would help you
HAVE A PLAN
If you want your money to grow, wealth to multiply then the first thing you need is a full proof and solid strategy plan. If your plan is not good then you would just end up fixing your errors.
Investment in shares is not a onetime game. You should keep on investing if you want to yield good profits.
Frequent trading would definitely add up to costs. Certain fees are always there which you need to pay, but do not indulge yourself into counterproductive things, which ultimately would make you use up your profits too. Best is to stick to the basic low cost transactions.
DO NOT BUY TOO MUCH AT ONCE
Try to buy at a certain amount and a certain period of time, which will give you advantaged of best prices. Hence if you want to invest to do not invest at a time, do it over a time frame of days, weeks or months.
It’s the most important and vital thing to diversify as it would help to minimize the risk. All the types of investment, goes thought the cycle of setbacks ups and downs… hence you should diversify to earn profits in long term.
DO YOUR REASERCH
Before you decide to invest choose the right industry and in that choose the correct company. It would take a little bit of time but, do your homework properly before investing because it’s ultimately your hard earned money you want to invest for betterment.
The most basic thing of investment is, you have to keep emotions aside what it needs is cool, calm and balanced mind.
You should now yourself about the market as well as which stock is good, if you are not able to do that than its always advised to have a professional do it for you .yes, we definitely talked that we should keep our costs low, but in this respect it’s always good to have someone manage your trade if you are ignorant about it,
DIFFERENCE BETWEEN STOCKS AND SHARES
For the first time investors it is difficult to decide where to invest his money .which option to select and when all the information seems to be confusing. In that the most common question asked is what the difference between STOCKS and SHARES is.
In today’s financial market, the distinction between the both is somewhat blurred, however
STOCKS mean ownership of certificates in multiple companies. You may not be only the stockholder but also the shareholder for each particular company as well.
SHARES mean ownership of certificates in a certain company. It makes the person the shareholder of that company.
The common misconception about stocks and shares is that they are different things. In reality they are the same thing but are referred to differently when talking about more than one company.
DIFFERENCE BETWEEN STOCKS AND BONDS
Sometimes it’s difficult for the new investor to differentiate the difference between the two. If I must say so, there are people who have been investing for a long time, but still they have not been able to articulate the difference. People think that stocks are more riskier then bonds and basically it is true also,
STOCK means ownership of certificates in multiple companies. The price to the stocks will actually depend upon the performance of the company. If company is doing well you will share the appreciation, but if the company has gone in loss, then u will equally be sharing the loss.
BONDS are “credit “given by the investor to the company. It’s a kind of loan provided to the company to carry on their activities. The percentage the investor gets is fixed.
The shareholder would stick to the shares even in bad times and would expect that the company would do better in future, but the bondholder is just concerned with his initial amount and the interest from the company.
It is possible that investor has invested in a small and a risky company and if the company shuts down then the bond holder has to lose his initial investment as well, but this happens in a rear case.
So what would be a wise investment BONDS OR STOCKS?
Well. It depends on the person personal decisions and what is his risk tolerance. Though the ideal long term portfolio could be a blend of little bit of both.
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