Managing Your Actions: 5 Considerations!
Although some politicians etc. emphasize how the stock market is performing, rather than the broader picture / scope, of the economy in general, very few are properly prepared and / or ready to handle the main needs, to invest in stocks. It takes an open mind and the ability to focus more on reality than on emotions, and consider a variety of potentially relevant factors. Having been a Registered and Principal Representative of investment companies for a considerable period of time, I firmly believe that potential investors (especially, in the stock market) should have a mindset that considers these variables and proceeds, in a more wise and focused way. . With this in mind, this article will briefly attempt to consider, examine, review, and discuss 5 important considerations regarding investing / investing in stocks.
1. Assess fundamentals / finances: Unfortunately, as with many things these days, many people are overly relying on the analysis / opinions of others, rather than thoroughly examining the fundamentals of a particular corporation and what the audited financial statements mean and represent. Read books, take courses, and understand key terminology. Know, read and understand budgets and financial statements. Why do analysts make certain predictions or analysis? Try to separate emotion from logic early on!
two. What to do when the price of a share rises: A stock can go up, stay stable, or go down in price. What should be done when the price of a particular stock rises after buying it? Ask yourself, if you don’t have it yet, would you buy at the higher price? If the answer is yes, buy additional shares! If not, do you sell what you own? If you’re unsure, then it makes sense to hold onto, or sell, some of these, to make sure you won’t lose money, if / when prices drop! Be objective!
3. The share price remains stable !: What strategy, is it logical and a smart approach, if / when, the price remains, more or less the same, as when, originally, you invested? Don’t fall into the trap of becoming emotionally attached to the particular stock, but rather, after a period of time, consider whether, again, if you were investing, again, Would you be putting your hard-earned money into this corporation? If so, hold and consider buying more shares, but if not, liquidate your position.
Four. Stock goes down: What should you do if the price drops? Some, immediately panic, are either sold, or are considering doing it! While that might be prudent, in some cases the wisest approach is, again, to ask yourself, if you still believe in the particular company, and if you do, perhaps you should, invest in more stocks!
5. Short, intermediate or long term: Consider whether you are looking primarily at immediate / short term results, one more, one intermediate, and / or one longer term. Know and remember why you bought Was it your intention, growth or income, or a combination? Are your objectives / goals / expectations somewhat realistic?
Before investing, fully understand what the main considerations and your personal comfort zone may be. Always consider these, as well as the potential risk / reward basis!