Guide to the Stock Market


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Investments In Stock Market

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This is a customer oriented career. The advent of the internet has reduced the necessity of incessant conversation between the client and the stock broker to a great extent but that has not provided much work-relief to the brokers. The reason is, the increase in the number of investors is staggering. The computers have solved many problems related to buying and selling, but have created additional ones. Everybody is running the race against time. The career in the stock market is meant for the mentally tough. Besides, you must have the basic interest in such activities. With the backup of such innovative interest, you will be able to build yourself by continuous application. The learning process never ends. The syllabus of shares is continuously expanding. You must have the applications of a politician, an economist, a sociologist and mathematicians put together to study and make a career out of the subject.

This is a career where you are answerable generally and sometimes specifically to thousands of investors who look forward to your guidance and trust. No investors will thank you for suffering losses. You are paid commission for the work that you do but at the same time, you have an ambition to succeed in your mission. A successful dealer is appreciated by the clients and attains popularity in the investors? circle. A satisfied customer is your best sales representative. This is a career of adventure, integrity and trust. Notwithstanding the use of the internet, transactions worth thousands of dollars are sometimes carried out through verbal communications.

Like the Banking Industry, new avenues are sprouting which have direct bearing on the transactions taking place in the Stock Exchange. Initially you can find opening in any reputed dealer as an apprentice, and then go to master the intricacies of the working under the atmospheres of pressure, in the playground of gains and losses. Some of the important sectors of investments are Investment Banking, Insurance Advisor, and Registered Broker for Commodities and Futures, retail Broker, Institutional Broker in trading equities or trading fixed income, IT-Securities Industry Specialist, distributor of stock books and magazines and the like.

You are a permanent learner here and you never reach the peak. Not permanent victory or defeat-what mattes in stock exchange is permanent effort. You need to have the perseverance to learn continuously. Your customer's interest are always more important than your self-interests. This is the business ethics.

For a career in the Stock market, you need not be a Chartered Accountant, Cost Accountant, CFA or MBA. Apart from the aptitude, you need to pass two examinations for entry. One is the General Securities Registered Representatives Examination. You need to work initially with a firm for four months for gaining practical experience. You will also have to pass an additional examination called Uniform Securities Agents State Law Examination. When this exercise is completed, you are ready to get into the business and by now you have the knowledge of theory aspect and the common terminologies related to trading and legal aspects. When you complete these examinations, you are still a trainee and will continue to enjoy that status for two years.

You are in a new profession now. You have entered the ?college of self-education? where your mind is your Principal. Your analytical abilities are your tutors. Once you have the license as a broker the practical test to your skills commences, and it all depends upon your business acumen and how the investor community accepts you as a dealer.

Investments In Stock Market

Make more money, this is the answer to most people.
If your reason is to make more money, then ask yourself these three questions:

1.Is your strategy making money?
2.Is your strategy safe?
3.How to increase the profit and minimize the risk?

RULE 2: HOW TO CREATE WEALTH IN STOCK MARKET WITH JUST $1,000

Let say we invest some lower price stocks with just $1,000 in the stock market, invest twice a year for short-to-medium term. If each time the return is double, you will make one million dollar cash within 5 years. If your starting capital is $20,000, after 3 years you will make one million dollar cash.

If you are using the same $1,000 capital, invest twice a year, but the return is only 50%, you will make one million dollar cash after 9 years.

So we can always start small. However, it is very important that we know how to select high profit and low risk stocks.

RULE 3: DON'T GET OBSESSED WITH STOCKS

Sitting and monitoring the market whole day long will not bring you profit. Instead, it increases pressure and misleads your judgment.

RULE 4: NEVER GAMBLE

95% of the people always buy at the highest price. They don't really know when to buy, just relying on news, rumors and tips. Only 5% of the people knows how to trade at the lowest price. That's why 95% are losing money, only the 5% are making money.
Investment Builds Wealth, Gambling Definitely Lose !

RULE 5: SAY GOODBYE TO NEWS

News used to be able to predict the market trend. But not anymore, it is difficult to judge which news could actually influence the market nowadays.

RULE 6: DO YOUR OWN ANALYSIS, FORGET ABOUT TIPS

Before investing, ask yourself these four questions:

1.How many people have already heard about the tips before you?
If many have heard about it before you, this news is already obsolete. The price is already high.

2.How long have the tips been spreading before it reaches you?
The next day?

3.Who told you?
Listed company director? Or friends?

4.Assuming that the tip is true, would you possibly know about it?
Normally insider news is not disclosed.

RULE 7: SELL YOUR STOCKS EVEN LOSING MONEY

It is easier to be said than done.

Sell at a loss is a difficult decision. Your heart will object, and your feeling will say "It is going to rebound, don't sell." Eventually price dropped further, causing a much tragic lost.

RULE 8: DON'T JUST FOCUS ON MAKING MONEY

How to protect your capital is much more important. Don't try to make 100% profit. It is already good enough to have a 60% profit margin.

RULE 9: HISTORY WILL NOT ALWAYS REPEAT

Everyone expects to make some money from the stock market before Christmas, New Year, annual budget announcement or election, but the stock market is not always bullish during these events. We can say history is not always repeated.
The best way is ?Let the Market Lead us?.

RULE 10: QUOTES FROM WARREN BUFFET

There are only two rules to make money in stock market:

The first rule: Never lose your money.
The second rule: Never forget the first rule.

RULE 11: TURN BAD STOCKS INTO GOOD STOCKS, DON'T JUST HOLD YOUR STOCKS

Don't hold your stock too long, there is a value when stocks are sold.

How long have you been holding your stocks until now?
Since Year 1993? 1997? Or Year 2000?

Why didn't you exercise your stocks? Long term investment strategy is not practical anymore. Even the blue chips also crash when the market collapses.

The best strategy is to sell the stocks that are not earning money, and reselect some good counters. Buy low, sell high for several times will earn you more than enough to compensate the lost.

RULE 12: WAKE UP FROM MISTAKES

Stop investing if you are not sure of when to buy or sell.

Without the knowledge of investment, you are bound to lose again. This is an age of information. Investors are using knowledge, techniques and strategies to make money. Without investment knowledge, how do you protect your money?

Building wealth through investing starts with securing your capital.

Dr. Steven Lee (Ph.D) is # 1 Best-Selling Author of Creating Wealth in Stock Market
Get your free ebook "Money Fish" from

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Both Micheal James & Dr. Steven are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

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