SAGE MODE

Investment Sectrets

Investing in stocks... your ignorance is someone's gain

One of the greatest risks one can take in life is forcefully trying to be part of a club one does not know how it operates. The same is applicable to the capital market; you cannot stake your money in a market where you have little or no knowledge about, isn’t that pretty risky?

When the stock market came suddenly under pressure from all angles, finding workable strategies work became a bit difficult for market players, operators and regulators.

Even at that state, there were still smart people whose job it was to figure out how to make money in any state of the market, the money you would lose in the market becomes their gain.

Stock market can go down as well as up, but experts recommend that if you are interested in investing your own money in the stock market you need to educate yourself to the highest possible level before you invest. This is because investing in the stock market is not in any way so easy but a process that is based on fundamentals.

“There is no easy money in the stock market. It does take hard work. Anyone promising instant riches in the stock market should not be believed. There is considerable risk of financial lose if you do not know what you are doing.

Have a risk management strategy in place. If in doubt do not invest,” said Barry Moore, an analyst at Liberated Stock Trader.

“No matter what the con-men, penny stock newsletter writers or gurus tell you, I can really tell you this. There is only one way to make money in the “share market/stock market”. Education”, he added.

But if you really want to make money in the stock market and understand why and how the market moves the way it does, you need to understand the Fundamentals.

These include the business climate, market cycles, economics, monetary and fiscal policy, and the role the government and central bank in the fate of the stock market.

“Combining a solid knowledge of the fundamentals of business economics with technical analysis is the key. Only then can you understand if the business climate is worsening, what effect it will have on the stock market”, the expert added.

“There is a combination of tools that works. Once you have a grasp of why the market moves in a certain direction (Economics and Governments), and an understanding of the way it moves (Cycles and Waves), then you can interpret charts (Technical Analysis) in a whole new way. Understanding “Supply and Demand” within a given economic climate is critical. Then we can combine Price, Trends, Volume and the relationship to give us something akin to a true visualization of what may happen. This will put you in the top 5 percent of stock market investors”, Barry added.

Secrets to investment

The secret to investing success is there is no secret. There is no magic words or millionaire insider tricks.

The secret  to investing success is to identifying great companies and buying them at a price that provides an opportunity for growth . in summary, the secret to investing success is two parts:

$ Identify a great company

$ Buy at a great price

However, some investors are not willing to do the necessary groundwork and look for a shortcut.

Everyone wants an edge when investing in stocks. The market can seem (and be) overwhelming and any advantage seems like a good chance to score a win.

However, too many investors think shortcuts are the way to success. Often these shortcuts come in the form of a frrined or associate. 

The power of a personal recommendation is compeling, even if the the suggestion is coming from someone who may know less about investing than you do. In days passed, such "word of mouth" information was shared at the office over the backyard fence. Now, it lives on social media sites, email and a myriad of other information techniques.

What hasn't changed is why you should ignore most of the these helpful tips.

A good rule of thumb is : Never buy a "great stock."

what, you say? Doesn't every investor want to own great stocks? Of course they do and so do you, but the "great stocks" I'm talking about are usually the ones a well-meaning neighbor or co-worker tips you off to as the next Microsoft or whatever.

INVESTMENT CLUBS

An investment club usually consists of a small group of individuals who pool their money to make joint investments. this can provide those who have limited funds with a vehicle thorough which they can have access to investments that may otherwise be beyond their capacity. Not only can pooling money create better investing opportunities, but members also save on transaction costs by sharing the costs and fees associated with buying and selling stocks as a group. Here are some issues associated with buying and selling stocks as a group. Here are issues to consider should you wish to set up an investment club.

 HOW MANY MEMBERS

It is common to have between 5 and 20 members, often groups of friends, neighbours, colleagues, church members, or relatives, who have diverse interests and experiences. if the group is too small, you may not accumulate enough money to make significant investments. Yet, if there are too many people, it can become unwieldy and awkward to have regular meetings or to reach a consensus regarding investment options. A number of between 6  to 15 people keeps group discussions  manageable. A balance between some novice investors along with some experienced investors will ensure that you have the right mix.

PUT SOME STRUCTURE IN PLACE

It is important to recognize that an investment club isn't just a group of friends who come together to invest-Money matters can be sensitive and if not handled right can damage relationships. Club matters should thus be formalised and a solid structure be put in place to guide a club's activity and ensure that its agenda is carried out efficiently and without friction.  A limited liability company or a legal partnership tends to be the most common structure, a formal agreement in place broadly stating roles and responsibilities. it should also include information and provide a record of the club's investment philosophy, of when, where and how often the group will meet, initial membership contributions and ongoing dues. it will also state how the club will also manage membership, how members can liquidate" To pay off (a debt, a claim, or an obligation" their investments, how dividends will distributed, divesting from and dissolution of the investment club. this vital bit of paperwork is absolutely essential to protect members should things not work out. all members must be in agreement of the clubs legal and operational framework and understand the risks before committing.

A COMMON INVESTMENT PHILOSOPHY

A common investment philosophy and an adherence to to its processes are essential ingredients for an investment club's success. Ideally , a clearly defined investment style should include some restrictions or at least quantifiable rules or limitations on the club's investment portfolio to ensure a minimum level of diversification always exists.

individual risk profiles and financial situations vary; members who are more aggressive  short-term investors or speculators may not partner well with the more conservative members who would rather wait to benefit from long-term capital appreciation. Members should have similar or at least compatible investment styles and objectives and should be prepared to support its approach.