Tips for Investing Wisely

When trading in the Stock Market, one should avoid,

1. Greed; being greedy can be a problem as it corrupts wisdom,
2. Making the same mistake twice,
3. Following the crowd, as the loss at the end is of the individual and not the crowd itself,
4. Putting all your ‘eggs in one basket’. You should diversify and spread your investment,
5. Using rumors as tips, as this can result in losses. A tip can end up as a ‘pit’,
6. Emotions; being emotional can effect reasoning. Traders should use research backed by fundamental reasoning.
7. Impatience; patience pays, perseverance gains,
8. Over borrowing; loan repayment is not an investment.

When trading in the Stock Market, one should remember,

1. Information; it must be checked. Opinion, facts or fiction? Act accordingly,
2. Knowledge; Stock Market principles and practices are unique. Master its cycles, its ups and downs,
3. Wisdom; success depends on your discipline and self improvement,
4. Action plans; plan a scheme, act and follow through. Have options and tactics to win the Stock Market game,
5. Shrewd and Thrifty; be prudent with your money. Avoid stocks that are overvalued but keep the cash or save for other investments,
6. Stock Value; be aware of stock’s true value, despite its ups and downs,
7. Risk Vs. Reward; minimize your risk, maximize your returns,
8. Investment protection; safety of your portfolio and Share Capital is more important.

A good example of understanding the above can be in the case of Hershey’s. Just because the chocolate tastes good does not mean that the position of the company is strong. A point should be made that the product of a company does not provide merit to its strength in the index.