What a funny time to be investing in the stock market.
The best advice that anyone can give you is that one should not put anything in the market that one can not afford to lose.
The second thing one must realize is that unlike years ago when people bought the “blue chips” and put it away for it to grow, you can no longer be “married” to any stock.
Any investment must be watched and dumped if it drops more than a certain percentage- for some that is 10%, for some 15%.
Don’t watch anything go down more than 50% and wait for it to come back. Especially nowadays when companies which have been stalwarts in their field for decades are now declaring bankruptcy.
Another great piece of advice comes from Peter Lynch who states that one should only invest in companies that one is familiar with (or use their products).
Let’s say that you want to invest in a chain store. Go shop at that store. Is it crowded or empty? How is the merchandise? Are they trying to offload everything or does it look buy inhaler online pharmacy ventolin inhaler boots like the merchandise is in demand?
The next piece of advice that most people will tell you is DIVERSIFICATION! That complies with the old adage-“don’t put all your eggs in one basket”. If big pharma has a bad week or month and all your stock is in a drug company, goodbye savings. If you have an equal amount in the energy sector which is doing well that week, you offset your gains and losses.
There are many who try to predict where the market bottom is. Many of the old parameters no longer apply. The ole PE ratio is getting quite a workout with the extreme volatility and fluctuations.
There is still money to be made.
One must remember what buying stock means…that when you buy stock you are buying a piece of the company. Do you like the products and services that the company offers? Are they in demand?
Make sure that it is a company that you would want to own and then smile as you make your first investment…..Congratulations, you are now the latest part owner of that company!