Tuesday, November 6, 2007

The Ultimate Stock Trading Tip - Myth or Reality?

It is commonly reported that the stock market averages about 10% per year return over the long term (decades). We’ve all heard of the stock market and probably have a general idea of what it is and how it works either from high school economics classes, television financial reports, and the countless film depictions of what happens on the floor of the New York Stock Exchange. As savvy stock market investors know, chasing after the one "hot stock" with the possibility of bringing instant riches is not a wise idea.

So, whilst the Stock Market is your best friend (trust me on this one) - the people who operate it may simply be their own best friend, and from your point of view, any advice you receive from them should be taken with a very large pinch of salt. This is the first in a series of articles about the Stock Market and what it can do for you - if you learn to love it allow it to be your friend.

The key to potential trading success and finding the stock market price for entry that is best for you is having a well-defined goal, the methodology to potentially meet that goal, and the discipline to stick with it. It is interesting and amazing to note that not until Charles Dow started compiling the Dow Jones Industrial and Dow Jones Rail Index and started writing about the stock market a little over a hundred years ago, stock speculation was regarded merely as a game for the rich or as gambling for the brave. Because I started to be cautious about investing as early as April 1998, since I thought that price/earnings ratios for the stock market were perilously high, I was not hurt personally by the "Crash of 2000" and had tried to get my clients into less aggressive and more liquid positions in their investment portfolios.

Even if you do not have large sum of money right now as principle to make really big profit out of value investing, you still want to start value investing early so that you can learn in and out of value investing in your earlier years of investing in the stock market. The nicest thing about value investing is that it will not distract your regular job if you choose not to stare at the stock market frequently in your office. When investing in the stock market, it is essential to have a sound set of rules or a system that has been tested in real time, no back testing or historical testing needed.

You may have heard people refer to “playing” the stock market as if it were all a big game of Monopoly. You must learn entry and exit of the stock market just as the divers in Acapulco have learned the correct moment to jump off the cliff.

What exactly does a stock market formula do? Whilst a stock market education firm's licence does not permit them to give investment advice (personal financial product advice), it is something we are frequently asked to provide. The stock market can be a great investment tool, but many people find themselves unsure of whether or not to invest in the market because they are unfamiliar with some of the more common terms associated with market trading.

Many people are afraid to invest in the stock market because they're afraid that they'll be scammed by a fraudulent stock broker. A stock market analyst is an individual, sometimes as a part of an investment firm, whose job it is to watch the changes in the market and keep track of which stocks and bonds are performing well and which ones aren't. If you find a stock that seems interesting but you aren't sure if it's legitimate, take the time to do a little bit of research on both the company that issued the stock and the performance of the stock in the market.

If you think that you might be interested in hiring a stock market analyst but aren't sure how you would go about doing so, then the information below should help you begin your search. These days, I usually begin my search for stock market gold by scrutinizing a company's fundamentals and choosing the best of the best.

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