Buying in a Bad Stock Market You don't have the patience to wait for
the next bull market to take off. You feel
that you're smart enough to outsmart the
market. But a weak market doesn't care about
you and your superior stock picking. Too
many of even the best stocks fall when the
bears are roaring.
Bottom Fishing You can get hurt trying to catch a
falling knife. When greed takes over, many
make the mistake of scooping up stocks at
"bargain-discount" prices, then watch them
continue to fall even further.
Just because a stock's price is low,
way off its historical high, doesn't
mean that it's "On Sale". Don’t
dumpster-dive!
Buying Too Late You've researched a company,
all the fundamentals are right.
The stock price is going up on
heavy trading volume, but you
feel that you've missed your
opportunity so you decide to
wait for the price to pull back.
But it doesn't - it keeps
climbing higher. Now it's up 25%
since you first confirmed that
it was a good buy, and you jump
in, just in time for it to pull
back 10% kicking you out.
Your indecision cost you money,
when your investing skill should
have been making you money.
Failure to Buy Stock
Same scenario as buying too
late, but you watch the big
run-up without ever buying. Fear
beat you.
Listening to Strangers –
Stock Buying on Tips The internet has thousands
of hot tips from both
well-meaning persons and also
those who are "pumping" a stock
because they want to dump theirs
at a big profit.
Every stock market investor in
the world is ready to bend your
ear and share his secret hot
stock. Tips are for restaurants.
Read the annual report. Figure
out exactly what the company
does and what its true prospects
are. Don't think that someone
else will do all the work and
hand it too you.
Capitulation, calling it
quits
When the market tumbles, many
investors that held on to their
losing stocks or mutual funds
for the ride down, finally sell
everything out of fear. When all
the sellers throw their hands
up, the market has bottomed and
is ready to go back up.
This is when you should have
your cash ready on the side,
ready to begin buying as the
market proves that it’s rolling
again.
Guessing on an Investment Acting on hunches is
gambling with your money. It is
not only risky, but it is
reckless and stupid.
“you get to the point where
it’s not winning that
matters, but avoiding
losing”
