Good Investing Lessons

Some very fundamental rules that I have not be able to keep with: 1. Diversify and invest Thinly across Diversify your stock portfolio over a basket of 30 over different counters across at least 5 different sectors. Warren Buffet said Diversification is only for those people who does not know what they are doing. Let's fact it. You are not an expert. Risking too much on any stock investment is a recipe for disaster, even for the sophisticated stock market investor. Keeping your individual share investments small keeps your capital pot safe and lowers the stress that can make investing unpleasant. Once you have 30 stocks you can grow the scale of each investment, but until that day stay small.  2. Take your time and do your research Never invest your money on a share tip. Stock investing is a skill you build up over time and with improvement your returns will grow. Share tips are empty investments and many unsavoury types try and lure you into investments with bad ...

Have you experienced buying stocks when the market has just made major advances or the counter has just moved up higher? Only to face the selling down the next couple of days? Well that must be a lot of of regrets there. Well, the consolation is that you are not alone. I frequently made the same mistake - huh, talking about not making the same mistake twice. This is one monster inside of me that is so difficult to kill. So often, I had forgotten about the commonsense of waiting for market to pull back before entering. This kind of emotion arose from a mixture of fear and greed. Greed in wanting to chase the profit and fear is worrying that the price may go beyond comfortable purchase level. On the hindsight, this is so silly. Pure silliness and nothing else. How many times you have read in the book about where to enter and when to exit. All the theory sounded so simple and logical. But, when at the thick of things, the price movement in the market can be so powerful and dominating ov...

There are two things investors or traders must learn. One is to control the greed instinct and the other is to be patient. "You know, a professional gambler is not looking for long shots, but for sure money. Of course long shots are fine when they come in. In the stock market Pat wasn't after tips or playing to catch twenty-points-a-week advances, but sure money in sufficient quantity to provide him with a good living." - Quote from Reminiscences of a Stock Operator This is particularly true for full-time traders who solely depends on speculating the market for a living. It is extremely important to preserve the capital. Cutting losses fast and letting the profit run is the basic rule that all traders must follow. Failing to keep to these rules are the main reason for the failure of many traders.