Investing in stocks on the NYSE is a task that many people want to do. Investing in the stock market – 8 Strategies for investing in stocks
The current economic crisis creates a skeptical gap in the minds of some very cautious people and does not want their fingers to burn. The news media have been filled with tragic stories of investors who have suffered huge losses since the Bear began to rule.
This article applies to those who want to continue to invest in stocks and continue to look for strategies to secure more money from their Nigerian stock exchanges. The idea that I would like to share with you here is the insight I get from my mentor. If you apply these strategies, you will find the long-term secret of the huge profits invested in the Nigerian stock market.
Strategy 1: Setting a Clear Investment Objective
This is where you have to start. What do you want to invest in? What time do you have a vision? Do you want short or long term investment? When you make money, what do you do? Short-term investors are not interested in the fundamentals of the company, which is why they are called speculators. Long-term investors should ensure that the investment is a strong company with impressive fundamentals. They must be companies that you are sure you can not quit in the near future.
Strategy 2: Acquiring Knowledge
The vocabulary for investing in stocks should be at your fingertips. If you really want to make money investing in stocks in the Nigerian stock market, your learning curve must be escalated to stay ahead of the average individual. Investing stocks is like any other business. Your search for knowledge should include common terms related to stocks, government policies, the world economy, finance and commodities, to name a few. Regular subscription to investment publications and stock market news should be a hobby for harvest. You should also be interested in knowing what prices are up or down. Do not invest in any company, you know little or nothing. This is a bad investment strategy that can take you to the slaughterhouse. Interested in the management of companies and individuals. What is their history? One thing you have to never forget is that the winners of this business spend a lot of money to get an investment education.
Strategy 3: The Right to Buy and Sell
Many people are wrong here. If you miss the right time to buy or sell, there is no way how you can profit from the stock. In May 2008 before the bear began to rule, smart investors earn good money, out of the market. When you buy the stock, the market price is lower than its true value, money really come into being. Then you will wait until it reaches a level where you can sell and earn a neat profit. There is no way you can make money when you buy stocks when they are the most expensive. This is a huge number of investors in 2008 made a huge investment error. In some cases, the result is fatal. Remember, a popular stockbroker died on the floor of the exchange, and prices continued to fall. His company is flooded with margin obligations.
Strategy 4. Determine the level of exposure you are ready to accommodate
There is a rule of thumb that you have to keep your fingertips as investors in the Nigerian stock market, widely adopted. This rule will significantly affect your investment decisions and guide you into the risks you can assume in any investment. This is a lucrative portfolio management rule. What is a rule?
Subtracts your age from 110. The rest is the percentage of your portfolio that should be in the stock. For example, if you are 30 and you deduct it from 110, you leave 80. That is, 80% of your investment should be in a 30 year old share. If you are 60, 50% of your portfolio should be in stock. The younger you are, the more active you invest in stocks. The older you are, the less you invest in stocks.
Strategy # 5: Avoiding an IPO wherever possible
Some experts may disagree with this. However, it is clear that Nigeria's stock market area has taught a less enthusiastic investment in an IPO. The time you spend investing in an IPO is too long between the time you get a certificate and the time to materialize it. Most of the millions of people who invest in IPOs eventually get only 10% to 20% of their applications. The remaining amount is returned after close to one year and the interest paid is negligible. Best to buy from the secondary market. However, once the electronic IPO policy line, may be improved.
Strategy 6: Do not keep a large number of shares
You should determine the number of combinations to keep in the shares. More than 10-20 anything is false. Your attention will be distracting, and if your portfolio is too big, you will have less effort and time to plan. Large investors focus on investing in manageable quantities. If the number is small, you will have more time to monitor your investment in the company.
Strategy 7: Do not put all your eggs in one basket
Interested in several departments and investing in the best companies in these sectors. Do not put all your investments in a company. Imagine a crisis in the future that would put the company in bankruptcy. What is your investment? So be wise. Spread a little risk.
Strategy 8: Mastering Your Emotions
This is the biggest fight you will find yourself launching. It will not be that easy, but you have to be determined to keep your emotions under control. Do not be greedy, never let fear consume you. If you succeed in putting these emotions in the bay, your investment strategy will work wonders.