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How do I invest in stocks?
Gone of the old day (as newbie) when I just invest base on what other people said (friends, collegues, newspapers and even BANKS!). I've even lost money after listening to Bank's "RECOMMENDATION" investing in mutual funds and currency. I also had a chance to learn from a new friend who previously was a remisier, the dark side of the stock market. "Someone" is just out there to make money from the retail investors like most of us. Those were really painful lessons as I threw away my hard earn money to make someone rich.
Fortunately, I took action to better equipped myself to continue to play in this investment game. I consider myself a better investor now with the knowledge I acquired from the investment workshop.
There are 3 parts of homeworks I do before putting my money in particular stocks:
- Identify and select a good stock / company with a good business.
- Value the stock price to see whether it is undervalue.
- Plan my entry point and exit point. Do technical analysis to determine the right time to buy and sell.
I will share these 3 parts in detail in the subsequent posts.
you should, in my opinion, learn to short stock as well.
ReplyDeleteyou just can't trade (profit) on the bull side alone.
Yes. I am shorting the stock by buying PUT option in US stocks market. Unable to short the stocks in Singapore.
ReplyDeleteyes u can, by opening a share borrowing account with your stock broker.
ReplyDeletebe careful when u short stock though.
buying option (put or call) in my opinion is not a good choice, unless u are hudgeing your exposure.
oh by the way, in the current market condition, it is better to be long (fully invested) rather than go short, until market tells you otherwise.
ReplyDeleteShorting stock has unlimited risk. I play safe just using long stock, short put option approach.
ReplyDeleterisk is define by you, not the market or instrument.
ReplyDeleteshort put (or call) is as risky as shorting stock or buying stock.
if its your prefer way, thats fine. so long as u can define your risk.
Agree. Option has directional, volatility and time value risk.
ReplyDeleteOne thing I learn is to know how to cut loss, one of the most important steps.