| ting in the stock market is full of risks and compared | | | | and draw a picture of how well this company will do. |
| to the real estate market is a gamble of your money | | | | Don't forget to read the world economy too! A good |
| and wealth! Nevertheless, many people have built | | | | resource for all of this analysis is CNBC website. They |
| tremendous wealth from the stock market. They did | | | | have amazing analysis reports where they have done |
| it because they knew what they were doing. They | | | | most of the tough technical analysis hard work for |
| knew the investing basics and the economic | | | | you. You just have to read the world economy and |
| indicators and used it to read the world economy and | | | | make decisions. |
| make sound investments. In a nutshell; that's really | | | | 3- Always watch the insiders: - one of the very |
| what it takes to succeed in the stock market. The | | | | important ways to succeed in the stock market is to |
| world economy however isn't an open book! It is a | | | | have extra knowledge resources to vaguely or |
| big ambiguous mystery novel full of twists and turns | | | | specifically know what is happening inside the office |
| to drag your mind away from the real ending. Those | | | | walls of companies. One way to do this is by |
| who know how to interpret the world economy and | | | | continuously reading the quarterly reports or called |
| translate its twists and turns into plausible clear | | | | 10-Q reports of companies. What to look for is the |
| indications, will cut through the clutter and win. | | | | stocks selling and buying activity of the company |
| The thing that everybody has to understand about | | | | board of directors or the private shareholders. Think |
| the stock market is that this market is not bounded | | | | of it this way, if the people who know best about |
| by the walls of the trading center or the limits of the | | | | what's happening in their own company are day after |
| big cities or even the oceans. Literally, anything that | | | | day selling large volumes of their stocks, what kind |
| happens in the world affects this market and the | | | | of indication you will get from that. Yes; dump your |
| more any incidence makes people fear the future the | | | | shares before the stock tanks! Another way is to |
| more the stock indicators are going to jump up and | | | | have good relations with some of the senior |
| down like crazy. Fortunately, if there is a well there is | | | | managers in the company that you want to invest it. |
| always a way. Even nowadays with the dwindling | | | | Believe me; this kind of friendship is very valuable. |
| economy, a lot of people are making a lot of money | | | | 4- Don't put all of your eggs in one basket: - as |
| from the stocks market! Why? Because while it does | | | | simple as this rule is, you would be surprised how |
| matter what the economy looks like when it comes | | | | many people are doing it in the stock market in a |
| to stocks, that still doesn't mean that all the stocks | | | | daily basis. Diversify in your portfolio by investing in |
| will be worthless. For example, if technology stocks | | | | different winning sectors and in multiple companies. |
| drop, energy or real estate stocks will go up for a | | | | Even if you know the CEO of a company and he |
| couple of reasons connected to the world events | | | | tells you that the stocks of his company will triple in |
| and economy! You just have to read the world | | | | the next week, still don't take all of your money and |
| economy! | | | | buy the stocks of this company. |
| These are the surefire ways towards better stock | | | | 5- Don't borrow excessively to create wealth: - |
| investing:- | | | | Suppose you diversified and did your due diligence, |
| 1- Read the world economy: - For example, gold was | | | | but 80 percent of your money is borrowed and you |
| at its cheapest prices back in 1999. That's because | | | | lost half of it. Financial recovery in this situation is a |
| the world was living in a state of relative political calm | | | | very hard thing to do. Even if you don't have a lot of |
| and the U.S. economy was booming. Oil supply was | | | | money, start small, build your wealth and take it a |
| abundant and there were no fears of shortages or | | | | step by step. If you don’t have a lot of |
| sudden increases in demand. After the events of | | | | money, start investing in small capital companies and |
| September 11, the world has changed considerably. | | | | a lot of good ones are available in the NASDAQ |
| Terrorism has become a serious threat. Security | | | | stock exchange. The good thing about small cap |
| measures have shot costs to the roof. The wars | | | | companies is that they have a tendency to shoot up |
| that followed in Iraq and Afghanistan have created a | | | | in value more than big cap companies in terms of |
| new chapter of instability. We outsourced many jobs | | | | percentage growth. So it will be really worth while |
| and opened many factories in China, India, Mexico | | | | your investment if you found that gem in the crowd. |
| etc. without knowing that while this reduces | | | | 6- Practice, practice and practice: - Even if you have |
| manufacturing costs, it created a boom in demand | | | | read a lot about using financial indicators, you did a lot |
| for energy in those countries, which translated to a | | | | of technical stock analysis and you have many |
| boom in demand for oil. As a result of all of this, gold | | | | insiders, practice before doing the real thing. Start a |
| and oil prices have shot up, the dollar devalued, | | | | fictitious portfolio containing real stocks, but with |
| inflation soared and the real estate market collapsed | | | | imaginary investments. After a month or two check |
| because of the rising interest rates of adjustable | | | | how well are you are doing. If you are not doing well, |
| mortgages. This should give a clear picture of what | | | | go back and see what where you doing wrong |
| kind of companies to invest in right now. These are: | | | | because you must've did something wrong to choose |
| oil companies, alternative energy companies, Gold | | | | bad investments. Correct your mistakes and retry. |
| mining companies and finally weapon manufacturing | | | | There are free imaginary portfolio tools available by |
| companies! I don't want to be pessimistic, but | | | | the big online stock brokers like E-trade or |
| recovering from this weak economy will not be easy | | | | Ameritrade. You can use these tools to buy stocks |
| and we have a long way to go in this dark tunnel. | | | | and track stock movements and calculate your |
| 2- Do your due diligence: - Don't take my words for | | | | earnings and losses instantly. You can also set up a |
| granted and go ahead and invest in every oil and | | | | simple Excel sheet to do this tracking. |
| alternative energy company. Even though you will not | | | | I personally like the stock market and I think it is the |
| regret it, still before investing, technical analysis must | | | | most lucrative and the fastest way to wealth. Real |
| be done on any company before you invest. There | | | | estate is good, but it delivers results over extended |
| are certain indicators to look at like: - how much debt | | | | periods of time. As long as you know what you are |
| to equity ratio this company has, what's their future | | | | doing, you should have no problems. Read some |
| expansion plans, how stretched their assets are | | | | reports and books about stock investing, practice it a |
| compared to revenues, what is their real worth in the | | | | little bit with small amounts of money and learn from |
| market (also called book value), what is their P/E | | | | your mistakes. Stocks are not risky, they are |
| ratio, which is the value of the stock compared to its | | | | calculated risks! |
| earnings and much more. Put all of these together | | | | |