The key to protecting yourself in the stock market is to understand where you are putting your money. Although risk might sound all negative, there is also a bright side. This is the reason why stocks have historically outperformed other investments such as bonds or savings accounts.
You may be thinking why I would spend so much time and effort understanding the process of analyzing shares and reducing risks when I can buy stocks with the help of other people suggestions, recommendations? No one would doubt about it, and neither do I, however, you will find different suggestions from different people and most of times they have no clue and are not expert on analyzing shares because they are new as much as you are in the stock market. Even you may make good money in a short period of time using those rumors, individual stock recommendation. But greater experiences come from failing a few times, but still striving to learn every aspect of investment methodology.
greater experiences come from failing a few times, but still striving to learn every aspect of investment methodology.
You need to know why you are investing, so you'll recognize when it's time to buy or sell to meet your investment objectives. Knowing your investment temperament will help you choose stocks you can live with.
"Avoid the crowd. Do your own thinking independently. Be the chess player, not the chess piece."
Effort matters. You can have all the best intentions in the world, but if you don't put forth the effort every day to make sure it happens, you might not get the results you were looking for.