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Stock market long-term investment success tips

Most of the stock market rules that you will read will have some sort of exception. However, the main principles cannot be disputed. If your goal is to make long-term investments that will be successful, the idea is not to focus on specific moments to invest, like fuel price decreasing or similar. The idea is to respect the main principles at all times. That is what we will focus on in the following paragraphs.
Do not chase hot tips

It does not really matter how close or knowledgeable someone is when an investment tip is offered. Making an investment always means that you have to investigate it yourself. For instance, you want to read a Betterment review before you invest with the company. You want to see price evolution charts before you invest in foreign stocks. There are cases in which the tips do pan out but this is just good luck. It is vital for every person that wants to be a successful long-term investor to be informed. Listening to the market is always what is very important.

Not being affected in the heat of the moment

Long-term investors should never panic in the event that a short-term negative movement happens. Tracking investment activities has to be done with a focus on the larger picture. You will want to always be confident about investment quality instead of being nervous about short-term volatility. An active trader is going to take advantage of short-term fluctuations in order to make some quick gains but if you want to be successful on the long-term these fluctuations are not those that are emphasised.

P/E ratio overemphasis

The P/E (price-earnings) ratio is something that is sometimes overemphasised by the investors. It is a very important tool but when you only think about this ratio to decide whether to sell or buy, it is possible that you would make bad moves. You have to interpret this P/E ratio based on a context. Never blindly use it without the use of other analytical processes.

Using penny stocks

So many investors think that they will lose less when they buy stock that is lower priced. That is definitely not the case. You can lose the exact amounts when values go down. A downside risk for a company with a $5 stock is exactly as dangerous as what you see with the $75 stock. Specialists actually highlight the fact that the penny stocks are riskier as regulations are not as strong and something can always go bad, without any real warning.

Not sticking to a strategy

There are so many ways in which you can pick the stocks that would fulfill your investing goals. Strategies will vary from one investor to the next but what is normally a mistake is not having any strategy when the investment is made. While it will take some time to pick the investment strategy you will use, after the decision is made, it is time to stick to that strategy.

Focussing on the present

One of the difficult parts of making investments is trying to figure out what will happen. Using past data is definitely what is necessary but the focus has to be put on the future, not on what happens right now. There are way too many investors out there that simply remain focussed on what they think is the maximum stock value that can be reached, without thinking about what may happen in the future. The decided maximum stock value is reached and the stock is then sold. Focusing on the future is what helps the most since it means better decisions are made on the long run.

15 Aug 2016 15:00

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About Boris Dzhingarov

Boris Dzhingarov graduated UNWE with a major in marketing. He is the CEO of ESBO ltd brand mentioning agency. He writes for several online sites such as Tech.co, Semrush.com, Tweakyourbiz.com, Socialnomics.net. Boris is the founder of MonetaryLibrary.com and cryptoext.com.




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