Do’s and Don’ts When Buying Stocks
We all know that stock investing is one of the riskiest forms of investments. Stocks can go up and down depending on several factors. In one of my earlier posts, I discussed several stock trading tips to all my readers investing in the stock market.
It is important to do your homework before engaging yourself in the stock market. Once you’ve done your homework and consulted with a financial planner or broker, it’s time to take the plunge. To make informed decisions, you need to review the list of dos and don’ts.
Here are some of the do’s and don’t that I’ve learned as part of the Rich Dad’s Coaching Program:
What TO DO when buying stocks
- Recognize that you aren’t in control of the management of stock investments. You’re investing in the management of the companies.
- Maintain meticulous records of all transactions. If you work through a discount broker, be sure you’ll get a year-end tax statement.
- Sell when others are buying, buy when others are selling (but only if the company is sound). Better yet—unless you’re a sophisticated stock picker—leave your money in for the long term.
- Be careful when buying “best picks”; they may be one-time performers or overpriced due to popularity.
- Invest in a minimum of five stocks so if one does poorly, the others may buffer the loss.
Rich Dad Tip:
“Avoid transactions through panic; keep your emotions under control.”
What NOT TO DO when buying stocks
- Never invest in a company without reviewing its financial status, prospectus, and SEC reports.
- Don’t give your broker the authority to trade without your approval.
- Don’t be afraid to disagree with a broker’s strategy or stock pick. At the same time, you should think twice before ignoring the advice of a broker who has always steered you right.
- If you’re picking stocks yourself, it’s not a good idea to invest in too many. Remember, you’re the one who has to track them.
- Don’t sell low in a slump only to turn around and buy high. Avoid transactions through panic; keep your emotions under control.
- It’s best not to buy stocks beyond your risk tolerance.
- Unless you have keen investor skills, don’t switch back and forth between stocks trying to catch the next wave.
Source: Robert Kiyosaki’s Coaching Program
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November 19th, 2009 at 9:26 am
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November 19th, 2009 at 10:17 am
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November 19th, 2009 at 11:16 am
Rule 1. Capital preservation
Rule 2. Don’t forget about first one.
Many time people only thinks of making money in stock market, when comes to making loss they don’t know what to do, except for holding on to the stock and hope that it will recover. Some time it just won’t recover and it even get worse. It is important to cut loss asap to prevent further losses so to preserve the capital.
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Tyrone Reply:
November 19th, 2009 at 12:46 pm
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November 19th, 2009 at 1:14 pm
So far, my technique gave me a good return. But take note that this technique is applicable if you have time to see the stockmarket daily from 9:00 to 12:10 in the morning.
Hope this gave you an idea guys!
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Tyrone Reply:
November 19th, 2009 at 3:13 pm
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November 19th, 2009 at 9:25 pm
My wife has a pet rabbit, and every time we come home to an empty tray of food, we find that to be our bullish indicator. Then we buy buy buy the next day! That is my technical bunny indicator.
Always input price limits folks!!
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November 20th, 2009 at 3:22 am
Zen Foo’s Note:
Rule 1. Capital preservation
Rule 2. Don’t forget about first one.
I want to add 1 more
Rule 3: Make your Capital resources with you anytime to execute the trade as an when reqd.
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November 20th, 2009 at 9:23 am
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November 20th, 2009 at 11:23 pm
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November 21st, 2009 at 12:06 pm
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November 24th, 2009 at 11:22 am
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