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The stock market is a casino! |
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No, the stock market is NOT a casino. Investing in stocks is fundamentally different from gambling. Buying shares or stocks represents ownership in a company and it entitles the buyer a claim on the company’s assets, as well as entitles him to share profits generated by the company. Very often, investors think that buying shares is a way to test their luck and a means of quick gains. This is wrong.
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Only for the wealthy |
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Well, the view is not accurate because anyone with good investment knowledge and some savings can invest in the stock market. Successful investors are not those who are wealthy but those who use information effectively and get help from licensed professionals to make investment decisions. |
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The best time to invest is during “bull run” |
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A bull run or when the market is up and active, is not the only right time to invest. With good information and careful stock selections, an investor can make good investment decision at any time, whether during the bull or bear market (when the market is down and inactive).
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Impossible to invest without “hot tips” |
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Even without “hot tips” it is possible to make good investment decisions if investors do their homework. Investors must have a clear understanding of what they are investing in and must not rely solely on hot tips. If investors do not have or have little knowledge on investing, then having an investment adviser is not a bad idea. Make sure he is appropriately licensed.
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Buy penny stocks during bullish market |
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Buying penny stocks or low-price shares during bullish market with the hope that its price will rise during the bullish time is not an effective investment strategy. A better strategy is to buy stock of companies with strong fundamentals at reasonable prices. This is because price is only one part of the stock investing equations. Do not be confused by the concept of value investing. It doesn’t mean buying shares of just any company whose market price is falling, as the old Wall Street adage says,“Those who try to catch a falling knife will only get hurt”. Value investing is about buying high quality companies that are undervalued by the market. |
