you have been trading your own portfolios with a certain success. Some
of you have been successful with professional money managers and brokers.
Some of you are just beginning to consider becoming more involved in Wall
Street, either by investing or beginning to understand the financial opportunities
levels of financial expertise, there are certain question that we should
be asking as we read financial news and watch MSNBC and other such programs.
Are we successful
investors? Perhaps it's luck; perhaps it's fate; perhaps it will change!
Or is there a fundamental understanding of financial well-being that will
enable us to survive and thrive financially.
segments we will discuss redirecting income to expenditure ratio. We will
also provide trainings for "retrenching". But for now, let us
assume that the readership has or will invest in Wall Street. In one capacity
or another, you will want to understand the following and if it is appropriate
for your own level of financial well-being, you may want to implement
some of these strategies.
you consider yourself "rich", "poor", "comfortable",
"struggling", "retired" or in the "rat race"
these basic rules apply to you. When investing in Wall Street remember
that you may be getting exactly what you are or are not paying for. Consider
who is watching your portfolio and who is watching your back.
Kiyosaki , author of the #1 New York Times bestseller, "Rich Dad,
Poor Dad" writes, "Invest first in education: In reality, the
only real asset you have is your mind, the most powerful tool we have
dominion over. Most people simply buy investments rather than first invest
in learning about investing. I go to seminars."
that you enjoy this Free Webinar that is our introduction to financial
IN WALL STREET
the first 8 points to keep in mind when you select a stock. These are
the points that money managers normally consider when making a decision
for you. If you ignore all this just remember; luck is fickle.
for stocks with large increases in earnings. Stay away from companies
for whom warnings have been issued. Buy stocks that have growing earnings
and revenues. If profits and revenues are growing, the company must
be doing something right. Wall Street sets prices for stocks based upon
current and projected performance, so if earnings and revenues are shrinking
then their stock price should follow suit.
at long and short-term trends, for the individual stock and in the stock
group. Are you buying a stock that is in a sector that is strong or
weak? If the sector is strong and the company you are looking at is
growing with or better than the group you have a very good buy signal.
If the group is weak but the individual stock you are looking at is
strong, than you have to look a little deeper. Why is this company strong?
Is it just a temporary phenomenon? What is management saying? If you
like the answers to these questions, then buy.
carefully at the Profit to Earnings ratio and compare it to the industry
group. Is the stock you are looking at in the high range of the group
or at the low end? Again this brings questions. If the P/E is lower
than the group find out why. Is it a lack of faith in management? Or
has it just been missed. This sometimes enables you to purchase a stock
at the low end of the price.
into changes in management. Has management in the company changed? If
it has, did the stock react positively or negatively to the news. This
is usually a great indicator of a company; if Wall Street has faith
in management they will usually support the company.
loosing stocks; not your winners. Most people tend to sell stocks that
show a profit. This is a common mistake. Sell a stock if it falls below
your price target or average down if you feel strongly about the stock.
Don't sell your "winners" unless you believe that the stock
is as high as it is going to go. If you gain new information showing
the company in a negative light you may want to reconsider and sell
- If you
buy a stock buy in part. Don't buy all that you intend to purchase at
once, especially in a volatile market. You don't want to miss out on
a stock, but that doesn't mean that you have to buy all of it at once.
By buying in parts you protect yourself if the stock makes a move down.
In volatile markets you can't know the best time to buy, or when a stock
will hit a bottom. Don't try to time the market or you will loose much
of the time.
- If your
stock drops 10% this may be a signal to sell it. Look into why it dropped.
If the fundamentals are still intact and you still like the company
you may want to sit tight and buy more in the near future. If the fundamentals
have changed; take your loss and move onto the next stock.
- Be well
diversified. Diversification is of utmost importance. Most stocks in
most sectors don't all go up or down at the same time; being diversified
protects your portfolio. Some sectors like technology are also more
volatile than other sectors such as pharmaceutical stocks. When your
portfolio is diversified you enable yourself to buy a little tech to
help the overall return of your portfolio.