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Monday, October 19, 2009

Stocks for dummies

[What is a stock market - basic information for stock investment for dummies]
A stock market is a public market for the trading of company stocks at mutually agreed prices. The world stock markets were estimated to be worth about USD$37 trillion in 2008. Investing in the stock markets can be both profitable & exciting. Learning to trade for profit can be a good way to make extra income. However, there are several fundamental information that a new investor must learn. Beginners will not find it easy to make money at the stock exchange initially. If it were easy, anyone who is an investor would have become a millionaire.

[Tips for investing in stocks for dummies]
Investing in the stock market can be confusing, especially for the beginner. Some guidelines that can be helpful for stock investing are as follow:
1. Understand that there are no set rules for investing. There are no guarantees and no perfect way to invest.
2. Buy "blue chips" and "big names" stocks. These have lesser chance of earning shocks and company failures.
3. Read up on stock investing. The list of stock investing books from the "Stocks for Dummies" series can be a good start (see pictures below):
4. Treat all investments as if they are the last ones that you would ever made.
5. Note down all the details of your investment transactions: profits, loss, rationale for buying, reasons for selling.
6. Diversify your stock purchases across industries and countries.
7. Buy when there is a crisis (after it has happen for a few months).
8. Invest in exchange-traded fund (or ETF).
9. Invest using "extra" money only, that is money you can afford to lose or at least hold on to through the rough times.

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