HOW TO INVEST
Sanity check:Just because you like a company's product doesn't mean it can't go bankrupt.Make sure the company is doing well.
2.Diversify:Make sure you don't invest in stocks that are all in the same market.For example,if you invest in 5 conglomerates stocks and the conglomerates market does poorly one month, you lose a lot of money.Diversification can act as a buffer for consumer market fluctuations.
3.Have an objective reason for investing.: don't invest in a particular stock just because your friend or relative is investing in that stock.Have a reason WHY you should buy a particular stock.If your reasons can't be cogent,at least make them reasonable.
4.Buy low,sell High:This succinctly put adage for investing is a valid strategy used by the masters.Don't buy high priced stocks with no future.If you buy 100 shares of a N100 stock and it goes up one point,you make N100.If you buy 1,000 shares of a N10 stock and it goes up one point, you make N1,000.This is not saying high priced stocks are bad but it is something to keep in mind.
5.Invest in companies whose products you regularly use: This is a good strategy for a few reasons.If you buy their products,you are increasing the profits of a company which you own part of .If you use their products,you are more apt to follow the company.If you use their products,chances are they have a superior product and will out-perform their competitors in their particuklar markets.
6.Research: Do your homework.Do not rely on stock market reports on network news to make your investment decisions.If you know nothing about a company, you are putting a lot of faith in whatever limited and possibly fictitious knowledge you have about the company.You don't buy a computer if a salesman says it is fast.You try it out and get the facts right.
7.Look at the charts:Make sure the stocks has a good history.Check their performance in the past few years against the relevant information you may have in the present.
2.Diversify:Make sure you don't invest in stocks that are all in the same market.For example,if you invest in 5 conglomerates stocks and the conglomerates market does poorly one month, you lose a lot of money.Diversification can act as a buffer for consumer market fluctuations.
3.Have an objective reason for investing.: don't invest in a particular stock just because your friend or relative is investing in that stock.Have a reason WHY you should buy a particular stock.If your reasons can't be cogent,at least make them reasonable.
4.Buy low,sell High:This succinctly put adage for investing is a valid strategy used by the masters.Don't buy high priced stocks with no future.If you buy 100 shares of a N100 stock and it goes up one point,you make N100.If you buy 1,000 shares of a N10 stock and it goes up one point, you make N1,000.This is not saying high priced stocks are bad but it is something to keep in mind.
5.Invest in companies whose products you regularly use: This is a good strategy for a few reasons.If you buy their products,you are increasing the profits of a company which you own part of .If you use their products,you are more apt to follow the company.If you use their products,chances are they have a superior product and will out-perform their competitors in their particuklar markets.
6.Research: Do your homework.Do not rely on stock market reports on network news to make your investment decisions.If you know nothing about a company, you are putting a lot of faith in whatever limited and possibly fictitious knowledge you have about the company.You don't buy a computer if a salesman says it is fast.You try it out and get the facts right.
7.Look at the charts:Make sure the stocks has a good history.Check their performance in the past few years against the relevant information you may have in the present.
posted by kingsley at 5:39 AM
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