For Open an Account: visit www.sharekhan.comFriday, 13 June 2008
Stocks and Shares Investment : How to Succeed in the Stock Market:
The Stock and Share Investment resources here will provides a source of information's for you to learn
and understand about the different methods of stock investment and how to succeed in the stock
market
Tips For Technical Traders:
- Before you enter a trade, determine your CUT-LOSS point, be it 10% or 20% etc. - Be a TREND FOLLOWER
as stock market CANNOT be predicted no matter how sophisticated the software is. - Take care of the losses and the profits will take care of themselves. - Capital preservation is the NUMBER ONE rule for Technical Trader. - Take OUT your emotions and trade mechanically (if you can't do this, then forget about being a technical trader). - Trading in a bear market means frequent buying and selling, taking advantage of short-term movement
Simple Stocks Purchase Principles:
Get-rich-quick schemes just don't work. If they did, then everyone on the face of the earth would be millionaire. This holds true for stock market dealings as it does for any other form of business activity.
Don't misunderstand me. It is possible to make money and a great deal of money in the stock market.
But it can't be done overnight or by haphazard buying and selling.
The big profits go to the intelligent, careful and patient investor, not to the reckless and overeager speculator.
speculator who suffers the losses when the market takes a sudden downturn. The seasoned investor buys
his stocks when they are priced low, holds them for the long pull rise and takes in between dips and slumps
in his stride. "Buy when stock prices are low, the lower the better and hold onto your securities," a highly successful financier advised me years ago, when I first started buying stocks.
"Bank on the trends and don't worry about the tremors. Keep your mind on the long term cycles and ignore
the sporadic ups and down..."
Great numbers of people who purchase stocks seem unable to grasp these
simple principles.
They do not buy when prices are low. They are fearful of bargains. They wait until a stock goes by and up
and then buy because they feel they are thus getting in on a sure thing. Very often, they buy too late just before a stock has reached on of its peaks. Then they get caught and suffer losses when the price breaks
even a few points.
Dividend Paying Stocks have lower downside risk:
Defensive stocks are usually companies that have huge cash piles and are likely to pay out good dividends
to investors even if the share price had slipped lower.Stocks paying significant dividends have less
downside risk than other stocks as long as the dividend isn't threatened. Of course, the biggest
Advantage of dividend stocks is that you get paid just to hold them:
Contrast that to the usual situation where the only way you make money on a stock is by selling it someone else at a higher price. That doesn’t mean that dividend stocks won’t go up in price. Some studies show that dividend payers actually outperform non-dividend stocks in total return.
Stocks with solid dividend prospects don’t go down as much as other stocks, because when they start fading, the resulting rise in dividend yield attracts more buyers. Dividend yield is the estimated dividend payouts over the next 12 months divided by the price you pay for the shares. For example, if a company share
price is $100 and a dividend of $6 per share is paid, the result is a 6% dividend yield.
The top-yielding stocks now are frequently real estate investment trusts, or REITs. REITs invest in real estate such as apartments, shopping centers, office buildings, and storage facilities. They tend to specialize in one or two of the areas. Because of their legal make-up, they are required to distribute virtually all of their earnings to the shareholders.
The dividend strategy is safest if you have a diversified portfolio. You essentially create your own little mutual fund. You also need some time, at least five years, to give the strategy a chance to produce results.
A company has to have cash to pay dividents. Unlike earnings figures, it can't be mainipulated because it's actual cash paid to shareholders.
However, dividend-paying stocks tend to lag when the market is rising sharply, but the dividends act as a cushion when stock prices are falling.
One of the basic rules of life also applies to successful investing -- success is highly dependent upon a combination of hard work, intelligence, and honesty.
Essence of Successful Investment:
Common stocks should be purchased when their prices are low, not after they have risen to high levels during an upward bull-market spiral.
Buy when everyone else is selling and hold on until everyone else is buying - this is just more than a catchy slogan. It is the very essence of successful investment.
History shows that the overall trend of stock prices like the overall trend of living costs, wages and almost everything else is up. Naturally, there have been and always will be dips, slumps, recessions and even depressions, but these are invariably followed by recoveries which carry most stock prices to new highs.
Assuming that a stock and the company behind it are sound, an investor can hardly lose if he buys shares at the bottom and holds them until the inevitable upward cycle gets well under way.
The wise investor realizes that it is no longer possible to consider the stock market as a whole. Today's stock market is far too vast and complex for anyone to make sweeping generalized predictions about the course the market as such will follow.
It is necessary to view the present day stock market in terms of groups of stocks, but it is not enough merely to classify them as, say, industrials or aircrafts, and so on. This is an era of constant and revolutionary scientific and technological changes and advances. Not only individual firms, but also entire industries must be judged as to their ability to keep pace with the needs of the future.
Stock Investment Market Experts Warren Buffett says :-
A depressed market makes it easier for our insurance companies to buy small pieces of wonderful businesses - including additional pieces of businesses we already own - at attractive prices. And third, some of those same wonderful businesses, such as Coca-Cola, are consistent buyers of their own shares, which means that they, and we, gain from the cheaper prices at which they can buy. Overall, Berkshire and its long-term shareholders benefit from a sinking stock market much as a regular purchaser of food benefits from declining food prices. So when the market plummets - as it will from time to time - neither panic nor mourn. It's good news for Berkshire.
The Stock and Share Investment resources here will provides a source of information's for you to learn
and understand about the different methods of stock investment and how to succeed in the stock
market
Tips For Technical Traders:
- Before you enter a trade, determine your CUT-LOSS point, be it 10% or 20% etc. - Be a TREND FOLLOWER
as stock market CANNOT be predicted no matter how sophisticated the software is. - Take care of the losses and the profits will take care of themselves. - Capital preservation is the NUMBER ONE rule for Technical Trader. - Take OUT your emotions and trade mechanically (if you can't do this, then forget about being a technical trader). - Trading in a bear market means frequent buying and selling, taking advantage of short-term movement
Simple Stocks Purchase Principles:
Get-rich-quick schemes just don't work. If they did, then everyone on the face of the earth would be millionaire. This holds true for stock market dealings as it does for any other form of business activity.
Don't misunderstand me. It is possible to make money and a great deal of money in the stock market.
But it can't be done overnight or by haphazard buying and selling.
The big profits go to the intelligent, careful and patient investor, not to the reckless and overeager speculator.
speculator who suffers the losses when the market takes a sudden downturn. The seasoned investor buys
his stocks when they are priced low, holds them for the long pull rise and takes in between dips and slumps
in his stride. "Buy when stock prices are low, the lower the better and hold onto your securities," a highly successful financier advised me years ago, when I first started buying stocks.
"Bank on the trends and don't worry about the tremors. Keep your mind on the long term cycles and ignore
the sporadic ups and down..."
Great numbers of people who purchase stocks seem unable to grasp these
simple principles.
They do not buy when prices are low. They are fearful of bargains. They wait until a stock goes by and up
and then buy because they feel they are thus getting in on a sure thing. Very often, they buy too late just before a stock has reached on of its peaks. Then they get caught and suffer losses when the price breaks
even a few points.
Dividend Paying Stocks have lower downside risk:
Defensive stocks are usually companies that have huge cash piles and are likely to pay out good dividends
to investors even if the share price had slipped lower.Stocks paying significant dividends have less
downside risk than other stocks as long as the dividend isn't threatened. Of course, the biggest
Advantage of dividend stocks is that you get paid just to hold them:
Contrast that to the usual situation where the only way you make money on a stock is by selling it someone else at a higher price. That doesn’t mean that dividend stocks won’t go up in price. Some studies show that dividend payers actually outperform non-dividend stocks in total return.
Stocks with solid dividend prospects don’t go down as much as other stocks, because when they start fading, the resulting rise in dividend yield attracts more buyers. Dividend yield is the estimated dividend payouts over the next 12 months divided by the price you pay for the shares. For example, if a company share
price is $100 and a dividend of $6 per share is paid, the result is a 6% dividend yield.
The top-yielding stocks now are frequently real estate investment trusts, or REITs. REITs invest in real estate such as apartments, shopping centers, office buildings, and storage facilities. They tend to specialize in one or two of the areas. Because of their legal make-up, they are required to distribute virtually all of their earnings to the shareholders.
The dividend strategy is safest if you have a diversified portfolio. You essentially create your own little mutual fund. You also need some time, at least five years, to give the strategy a chance to produce results.
A company has to have cash to pay dividents. Unlike earnings figures, it can't be mainipulated because it's actual cash paid to shareholders.
However, dividend-paying stocks tend to lag when the market is rising sharply, but the dividends act as a cushion when stock prices are falling.
One of the basic rules of life also applies to successful investing -- success is highly dependent upon a combination of hard work, intelligence, and honesty.
Essence of Successful Investment:
Common stocks should be purchased when their prices are low, not after they have risen to high levels during an upward bull-market spiral.
Buy when everyone else is selling and hold on until everyone else is buying - this is just more than a catchy slogan. It is the very essence of successful investment.
History shows that the overall trend of stock prices like the overall trend of living costs, wages and almost everything else is up. Naturally, there have been and always will be dips, slumps, recessions and even depressions, but these are invariably followed by recoveries which carry most stock prices to new highs.
Assuming that a stock and the company behind it are sound, an investor can hardly lose if he buys shares at the bottom and holds them until the inevitable upward cycle gets well under way.
The wise investor realizes that it is no longer possible to consider the stock market as a whole. Today's stock market is far too vast and complex for anyone to make sweeping generalized predictions about the course the market as such will follow.
It is necessary to view the present day stock market in terms of groups of stocks, but it is not enough merely to classify them as, say, industrials or aircrafts, and so on. This is an era of constant and revolutionary scientific and technological changes and advances. Not only individual firms, but also entire industries must be judged as to their ability to keep pace with the needs of the future.
Stock Investment Market Experts Warren Buffett says :-
A depressed market makes it easier for our insurance companies to buy small pieces of wonderful businesses - including additional pieces of businesses we already own - at attractive prices. And third, some of those same wonderful businesses, such as Coca-Cola, are consistent buyers of their own shares, which means that they, and we, gain from the cheaper prices at which they can buy. Overall, Berkshire and its long-term shareholders benefit from a sinking stock market much as a regular purchaser of food benefits from declining food prices. So when the market plummets - as it will from time to time - neither panic nor mourn. It's good news for Berkshire.
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