Stock Exchange Investment 101

Stock Exchange Investment 101

It will only take around $5000 to start investing in the stock exchange. But word of warning! Do not use money which you cannot afford to lose like your retirement money. The economy and the stock exchange are too unstable for you to lose everything as what happened to a lot of retirees when the economy fell almost three years ago.

Diversify your stocks by buying several stocks of different companies. The risk is too high if you put all your eggs in one basket, if the basket falls like it has several times, you lose all your investments. This is what happened to a lot of people when they bought only one kind of shares from one company and were not able to sell in times when the company declared bankruptcy.



If you want to invest in stocks, please don’t fall in love with them. If you are left holding the shares certificates which are worthless the only thing they would be good for is for wallpaper which would be aesthetically blinding. Sell the stocks when you see that the price is over and above what you paid it for. Buy when the stocks are low. And sell!



When picking stocks, read the newspapers and watch the television. There are a lot of listed companies that get media attention. If the attention is positive you can buy but it may be expensive by that time. So try to keep up with the news and learn to speculate. If the media turns sour, sell immediately. That way you would be able to still get profits rather than a total loss.



Remember the ‘stop loss’ tool. This is very important in saving yourself from losing everything; this is also the most cautious way to day trading. If you invest in a stock, ask yourself how much you would be willing to lose if there is really a loss. So if you see the price drop, sell.

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