6 Golden Rules for Successful Stock Market Investments

Six golden rules of investing

Do what successful investors do and apply the following rules:

1] Time

Like the famous phrase states, “Time is money” this means that time is one of the most important things and to understand and know its value is even more important. The time factor comes into picture when you are investing over a long period of time. In terms of stock market, you must keep in mind that time is your friend and not your enemy. The trend in stock market is that it goes on increasing. For example investing for a minimum of 10 years will increase the chance of successful investments by 19%. Therefore, getting out of the mentality of short term plans should be changed to long term investments. In order to be successful it is thus important to hold on to a longer period of time.

2] Always Invest in Good Companies

The next important rule is to make correct investments in good companies. Stock market investments are easy to understand if one understands which the good companies are that exists in the industry. Companies that are most efficient in making profits and growing faster  are the ones that you should usually invest into to be a successful investor.

3] Do Not Put All Eggs in One Basket

The next important thing is to invest money into different companies and not invest into a single company. If this one company fails to make profit and increase your investments, you might go into losses. But if you have invested in a number of companies you will have the back up of other companies even if one fails and your investments will not face drastic loss.

4] Don’t Listen to Stock Tips

It is extremely important to make your own decisions and stick to them because there are many cases where people try to give tips about what to buy or sell. These tips are mostly given because your decision is based on these tips and they in return are beneficial to the people giving the tips and not to you. Therefore instead of listening to various advices and tips from people, its best to stand besides your own decisions.

5] Be Comfortable to Cutting Your Losses

It is important to get accustomed to cut your losses and try to be more flexible. If you are new to stock investments, it is not necessary that you be successful at your investment at the very first time. It’s really important we have very strict rules. If a stock goes down twenty percent from the point we buy we sell it.  It is absolutely ok to make wrong investments because that is the mistake from which you can learn from and not repeat the mistake in the following investment.

6] Get Professional Advice

Instead of listening to different people and their tips it is better to make use of a professional advice and advisors. These mutual funds and stock market advisors will be able to guide you properly as to what and how to invest. These advises will be aligned with your personal interests and goals, thus it will be mush easy for you to make successful investments and long term savings.

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