Published On: Mon, Jul 29th, 2013

Be a Smart Trader!

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           The first thing one needs to realize about making money in the stock market, is that despite the constant vigilance of the financial regulators, fraud is a common occurrence in the financial markets.  You should always be extremely skeptical about anything you invest in, even if it appears to be a “sure thing.”

          Many small, microcap securities actually don’t have a business and there is no escape from the webs they knit. There are also many “good” companies that are legitimate and profitable with products, not just stock. You should always do your own research, don’t rely on others. If it sounds too good to be true, it likely is. Do not listen to tips, there is no such thing as a “get rich quick” opportunity. Make sure you mitigate your risks, diversify your portfolio. The bigger the risks you take, the bigger the diversification should be. Never put capital in, which you can’t afford to lose.

          If you build a diversified portfolio of companies carefully selected and monitored by you, you can’t go wrong in the stock market and can expect a decent return on your investments. If you violate the above rules, your money could disappear quicker than you know it.

         In summary, do you Due Diligence and invest in companies that have a good and successful plan, not a one day wonder.

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