Investing in Stock Market - Beat the Odds (Part I)

Lets take a look at the first 4 “Don’ts” and see how they can help you keep a cool head when investing…..

Don’t panic

Past weeks, you may have read a lot of negative headlines about the economy of the world, how there may be a impending recession coming up, when and how nobody seems to be able to predict but everyone is talking about it. Do not panic. Panic clouds your brain. If you have stocks and funds in your hands, do not just sell and run. Do an inventory; some stocks are worth holding on to while others are not so strong in their fundamentals. Take stock and sell only those you do not intend to keep but sell it with a profit or only if you need to rid of this stock, at a minimum loss. This will take me to the next topic of not to be greedy.

Don’t be greedy

If you have invested in funds and stocks, you would have already set a target. If you have not, take stock again. Target your investment with time and percentage. Time will be how long you can afford to hold on to these funds. Percentage is how much do you want to earn for the time period you are holding on to. Set a realistic target. If you want a 80% - 100% return, you have to set your timing to 8 to 10 years or willing to hold even longer. If not, take a 10% to 30% profit depending on the market and stock situation. Do not be greedy.

Don’t be impatient

Do not just throw in the towel. Take time to ponder on your investment portfolio. Patience always pay. If you go through each and every one of your investment slowly and patiently, you will definitely see more clearly what you can do with each one of them. Take time to make your decision.

Don’t take risk

Take only calculated risk. The returns you get are proportionate to the risk you take. This is a fundamental law of the markets. To earn a high return in order to build true wealth, you will have to take risk, however, ensure you take calculated risk. Put some of your money in some risky assets like stocks, this is the only investment that can beat inflation, however, ensure that you go for fundamentally sound stocks.

Next — 3 more “Don’t” and 1 “Do”……………