If you’re a new investor then here a few guideline and rules that I recommend you follow. It’s not a must but it will help save time and money. Once you get to a point where you know how to invest then you can make your own set of rules and guidelines that match your investment style.
- Don’t invest money that you’re not willing to lose.
Meaning don’t invest your rent money and other type of necessities.
- Try to stay away from penny stocks, otc (over the counter) stocks, stock that was recommended from a spam email, stocks that have low trading volume.
- Do your own due diligence. In the age of google I’m sure you can find a way to find out more about a stock that you’re interested in. You’re the one pressing the buy button.
- This last rule has to do with more about my own trading philosophy & mentality. When others are selling we tend to buy, when others are buying we tend sell. We don’t follow NORMAL emotions. Don’t be the emotional investor. If you’re staying up late nights wondering whether that stock will go down or up the you’ll never get any sleep.
- Follow the rules. Don’t let greed, fear disuade you. Learn from your mistakes or you’ll keep making them.
- Have an exit strategy. If you bought a stock then prepare yourself for 2 scenario.One how high do you want it to go before you sell. I know that sounds like an odd question but this will save you sleepless nights wondering if the stock will head down tomorrow.Two how low do you want the stock to go before you sell. Don’t base it on emotions or maybe.
I’m sure as time passes you’ll add and modify your own set of rules.