Secrets to big money

If you want to build up your wealth or want to make a living out of share investments both are possible but the strategies and the risks involved would be quite different. It is much more easier to increase your wealth with good share investment strategies over a period of time then it is to get a regular income out it. In building wealth over a period of time the tax man also lends you a hand by giving you a whooping 50% tax benefit on your capital gains tax in some countries (egs. Australia) if you hold the investment for more then one year.If you are just starting out you should spend some time learning about the different share investment strategies and understanding what are the various terms and tools available to help you out. Never invest by just getting a tip from a friend or on the basis of an email from some unknown shares guru. Do your own research before putting your hard earned money on an upcoming stock.

Some good share investment tips

Read books, scan the internet, gain knowledge and become a learned share investor.
You should understand and know the basic terms and tools like P/E ratio, dividends, EPS, DPS, dividend reinvestment plans, book value, franking, short selling, stop loss, basic and advanced charting techniques.
Use a broker that provides internet share trading and compare the the facilities available on the website with other broker websites. If you are not after advice from the broker then the internet broker will prove to be much more economical over a period of time. www.comsec.com.au and www.etrade.com.au are good internet brokerage sites for the Australian share investor.
Remember the fundamentals of a stock are very important and always try to buy low and sell high. Stop losses should be an integral part of your share trading. Remember the golden rule “cut your losses short and let your profits run”.
Never put all your money in just one share investment. Remember the old saying “Never keep all your eggs in the same basket”. Diversification is very important to keep your money safe and growing.
It is inevitable that your share investments will not just keep growing, there will be periods when they start to decrease in value. The share market will have its periods of gloom, but if you invest in quality then you can be sure that your share investments will grow over time. On an average the share market has always outdone a simple saving strategy.
Borrowing to invest can be a very good strategy for the young and who can invest wisely with some good advice. This strategy is known as leveraging and can become a very good tool to become rich fast, but if done badly it can also make you loose your capital at a much faster rate.
Your investment should contain components of both risky and safe share investments. Remember your risk component should be larger when you are young and should decrease with age. It is easier to recover your losses later if time is on your side and the gains are also always proportional to the amount of the risk in the investment. But the risk should always be a calculated risk.
Never sell when you feel the stock has reached its bottom. This way you will loose money and also loose a chance of any recovery. Remember that history tells us that the stock market has always bounced back.
Be patient and always invest with a long term view of the market. The market is known to transfer the money from the impatient to the patient.
You will make mistakes. Learn from your mistakes. Remember everyone makes mistakes.

Click here to learn about Penny Stocks

admin | April 16, 2011 10:44 am

1 Comment

By Tike, May 22, 2011 @ 6:59 am

And I thuoght I was the sensible one. Thanks for setting me straight.