Investing Theory from a Noob
Thursday, October 18, 2007
Been into stock market recently and I managed to cash out jus before the STI dip. And after so many books that I’ve read here are some tips which could be applied to yr life as well.
1) Always Do Research
You must always research, read the news paper, past trends before u jump into any investment or a market. Know the market share, who are the current competitors and future competitors as it would help you to decide how much money to put in.
2) Have faith in the Investment
Once you have put in your money, u mustn’t jus cash out if it turn bad. You must hold on to it for a little longer.. If yours is a good market/share, it will bounce back in a few days. Jus hold on to it..
3) Keep on Investing
If the share have been giving reasonable return, it world be good to keep on investing as long as u have the cash flow as over time the dividend will be quite good. Better than bank interest rates…
4) Withdrawal to Cut Losses
If the Market too small with too many competitors (bubble tea), it might be advisable to withdraw from the market to cut losses. Only those cashflow rich can maintain in those long term price wars. U might as well invest on other market which can give u the returns you desire.
If the share price keep on giving undesirable returns, sell it and not to lose all your money with it. Other shares which give good return are out there..
Hmm… this looks like product life cycle. or economics… So don’t just enter/exit from a market, reasonable risk are involves. It all depends on your risk appetite….
What action should i do?? Is the market too small? Is a price WAR going to happen? I don't think i can go to war and study at the same time... Too much stuff to care about................................................................................................................