Winning Investment Strategy For The Long Term - It is important to understand that good investment strategy is ownership of a stock which represents ownership in a business, not just a ticker symbol and a price. It is the same as owning a stake in any business and you must act like an owner.
It is important to understand that good investment strategy
is ownership of a stock which represents ownership in a business, not just a
ticker symbol and a price. It is the same as owning a stake in any business and
you must act like an owner.
Your stock buying and selling decisions should be based on the fundamentals of
the company and not how you think the market will perform in the future. If you
focus on the companies strengths and weaknesses, you can remove all other unimportant
information and simplify the investing process.
One of the keys to making money and good investments is in understanding the
businesses and industries in which you invest. You should be sticking with your
investments long term. Many studies have shown that if you had been out of the
market for just a few of the highest returning days of the year, your overall
return would be significantly smaller. This shows why it is important to stay
invested for the long term and not attempt to time the market.
If you glance down the Forbes list of richest people, you will find that not
one of them has made their very large fortunes from frequent trading and trying
to time the market. The best investors use the stock market to buy attractively
priced companies and hold them while the business expands and prospers.
Any investor who buys stock in a good company based on solid research should do
nothing more than monitor the company and develop a dollar cost averaging plan.
This will over time allow his investment to grow. In time, his intelligent
investing decisions will pay off well as the value of his shares appreciate.
One of the costliest mistakes made by investors is based on fear. This is also
one of the easiest mistakes to make. One of the he worst things an investor can
do is research a company, make a sound decision based on that research, and
when the market hits a bad downturn, sell in fear of losing money. This is one
of the reasons that panic and fear play a roll in the market.
In a down market, if the fundamentals of the company remain the same, then a
stock will have become more attractively priced if it has gone down. Logic
dictates that you should be buying more of the stock rather than selling. It is
this principle and inner discipline that is needed to be able to become a
successful stock market investor.
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