In the stock market or stock exchange, unlike your typical
supermarket where goods and services are bought, people buy and sell shares of companies and large corporations where the goods and services are created.
The most common stated principle of investing in the stock market is “Buy Low
and Sell High.” However, buying low and selling high sounds much easier than it
is practiced.
My personal experience with business and investments has
been quite extensive, I was taught about business from my step-father Wayne,
who has owned and operated several businesses over the years, and I was my
Grandfather’s apprentice, so to speak, in the operations of finance,
specifically the stock exchange. From my young teen years, all the way through
high-school, and even now, I have always had a peaked interest in the world of
business and finance. I have been personally invested in the stock exchange since
I was 18. Throughout my teen years I viewed the stock exchange solely as an
observer, where I learned many of the basic principles of finance, but it was
after I had “put my money where my mouth is” that I really learned about how the market operates. Granted, when I
started in the stock exchange it was in the spring of 2008 and my portfolio
declined over -250% during the recession. However, now it has grown quite
considerably after the market came back and I reallocated my investments. But
nevertheless, always be aware of the risks that entail any investment
regardless of the projections. Here are a few pointers that I would recommend before
buying stock in any company…
Get The Scoop Before
investing in a company that is traded the stock exchange, one must perform
their due diligence in searching out as much information possible in regards to
the company. Some of the key information would include their business model,
financial stability/assets, marketing strategies, and most of all their target
market. Doing all of this will help you determine whether or not this company
has an idea that will produce a profit, or not.
Be Ready For Anything!
This money is your money, and in some, if not all, cases, you’ve worked
hard for it. The last thing that you want to do is lose all of your cash to a
bad investment. Every investment is a gamble to an extent, depending on how
much homework you do, and there is a chance you can make enough money to retire
one day and end up selling your physical assets in order to cover your losses.
Never use necessary
funds for an investment! Use money that you would use to go out to a movie,
or to a restaurant to make an investment. Always remember, whatever money you
put in comes out of your pocket so if you lose, make sure it’s only your pocket
that you lose, not your shirt!
Make a financial
goal, and stick to it. This principle has been something I’ve learned
through my experiences handling my personal finances. Having financial goals
not only help you to increase your wealth, but to also help you keep a level
head when making investments. This principle should help you to become more
than financially invested in a company, should you choose to do so, but to also
become intellectually invested in observing the operation of the market.
The application of these few principles are not guaranteed to help you make a profit, but hopefully you will have a better idea of some of the things to expect before becoming invested in the world of finance. There are many different principles that are used in finance, if there are any questions or principles that you would like me to respond to or talk about please feel free to post a comment on this blog or via facebook!
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