There is no magic formula or “secrets” of investing. Rather, investing is a disciplined process and one that requires careful analysis of the fundamentals. Many novice investors have learned the hard way though sustained losses that investing is more than simply throwing darts at a stock chart or reading recent gossip columns written by the “stock market guru” flavor of the month.
True investors cannot afford to be fans or followers of market gurus that recycle the same “picks” as their peers and simply load their investment newsletters with outdated or ill-timed selections that are based upon nonscientific-unquantifiable “insights” or “tips” grounded in conjecture and innuendo.
The financial markets and investing public has witnessed far too many recycled “money making” ideas (more like rumors) both in the mainstream business journals as well as in the murky world of online discussion forums and chat parlors. For many non-professional investors, incurring excessive losses have been a painful learning curve made worse after we have relied upon untested “money making” investment methodologies. Such practices are far too uncertain and speculative for most investors: Speculative investments are more akin to gambling than wise money management and investing techniques. Without clear strategies, investing takes on a form of punishing self-inflicted defeat.
While determining the level of suitable investments for a particular portfolio or investment strategy, investors must be willing to devote the time and patience to setting realistic investment goals as well as having the discipline to either cut losses or capture gains. Because we all have a different level of risk tolerance, investors must develop a principle understanding of the fundaments and achieve some level of planning in their stock selections practices. True investment strategies must ultimately be supported by more than just “hunches”; they must be based upon tested practices.
To be a successful investor our investment decisions must be supported by a thorough knowledge of the fundamental principles of investment on such subjects as establishing investment goals, assessing risk and reward assessment, selecting appropriate or suitable shares, creating a balanced portfolio, and mitigating losses.
To that end, stockmarkets.com is pleased to provide its insights into the world of investing and hopes that you will enjoy this section and the commentary that follows.