How to invest in stocks? A report

stocks and trading basics

Wherever you look... investment advise.

Think twice before you act.

Food for thought is here -before you're thinking of those 'tips'.

[B]Why the analyst on tv giving that super stock recommendation?
Who is paying him?God knows.[/B]

The Internet is awash with sites claiming to give free investment tips.
[B][SIZE="4"]If really you get a genuine tip, to buy an individual share, you should be cautious and very suspicious.

Who is giving you this information and what are their reasons for doing so? [/SIZE][/B]

What you must want to look out for
are [B][SIZE="4"]free investment strategies [/SIZE][/B]instead of [B]free investment tips,[/B]
Remember successful long-term investment does not come from lucky tips, but comes only from sound principles.

Couple of hints go below to make you think deeper.

1).[B]Don't try to time the market[/B].
Timing the market is making frequent
trades and switching investments regularly to cash in on day-to-day price
moves. As an individual investor you should not be
trying this. It is risky, buying individual shares in risky, and the
fees involved in frequent trading of mutual funds will eat up all your
profits.

2).[B][SIZE="4"]Next tip is do not go for dividend [/SIZE][/B].

If you have sought out the stock solely for dividend purpose, and bought it close to the time of the dividend payout, the share price will already reflect the expected dividend. Therefore you have already paid for the dividend anyway. A balanced portfolio will have some dividend stocks and some speculative stocks.
Don't buy just because of the expected dividend.

[B]How about buying stocks based on earnings information.[/B]

Most earnings reports, are underestimated. It simply is no more a major news to hear that a company has exceeded expectations.
Remember,the big institutions stay ahead of others to lay a hand on postive or negative information and would quietly buy or sell.If they bought already,they would sell the moment price shoots up on news becoming public,and soon due to heavy selling price will drop.People wont understand
why after declaring good results,the stock price has dropped?
It happens because smart money pulls out as profit shows up.

[B]What you might want to do is look out for companies that missed expectations. [/B]These have lower share prices and if you
do your homework properly and think the company can turn itself around, then you are hooked up to a winner, and well in advance.

Slow and steady wins the race!