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Investment Insights

5 March 2007 - Markets - Editor

Are direct stock market operations worthwhile for individuals? Financial institutions certainly do not think so, and would like to take all our investment decisions. Most of them do not really guarantee the integrity of your capital, if you read the fine print, so some continue to prefer direct stock market operations. Online trading has certainly added grist to this mill, for you can buy and sell with clicks of the mouse, at your convenience!

Here are 5 top points to bear in mind when you agonize over the pros and cons of working the stock market directly, rather than leaving your finds to a professional:

  • Direct stock market operations need serious time! You have armies of experts against whom to compete! Be prepared to spend an hour every day of the week on your portfolio, and at least twice that on weekends.

  • Study each company in which you deal on the stock market. Try to experience Interactive Marketing with them. Stay away from exotic enterprises which do things you fail to grasp, and which operate out of your reach.

  • Understand each stock market sector with which you are involved. What are the key factors for success? Which changes will affect the industry in future most?

  • Prefer sports betting to stock market speculation! Abjure temptations to make quick kills, and focus instead on steady long-term value appreciation. Look for companies which buck trends, rather than slavishly follow indices.

  • Consider the time value of money. Favor projects with quick pay backs, and be wary of proposals with long gestation periods. Always consider how sensitive projections are to changes in assumptions.

Be conservative in goal setting, and aim to deal with risks and uncertainties, rather than maximize immediate financial rewards, and remember the words of the great 19th century Indian religious seer, Swami Vivekananda: “Never believe anything unless you know it to be true. Ask questions and find out the truth for yourself”.

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