Buy Stock - Some Basic Advice
Investment in all stocks should be long-term, and every stock purchased should have a history of raising their dividend every year. All dividends should be reinvested back into the company’s shares (also commission-free), until retirement.
The dividend is the one factor a company cannot shirk. The money has to be there to pay the shareholder. If a company raises their dividend every year, they've got to be doing _something_ right. When a company has a long history of raising their dividend every year you it's win-win whatever happens (almost). Either the stock goes up, or the lower stock price just means a higher 'divvy'.
When a loss occurs, examine it and learn from it. Don’t try to get even. This is what gamblers do, and they go broke fast. You ignore rule of buying low, selling high, because you’ve lost too much and are desperate to get your money back.
* Think before you jump into anything
* Don't go into the stock market to feel self-worth.
* Look outside the market for personal development.
* Make a firm resolution to stick to your chosen strategy.
* If you are emotionally high or low, take a day off. You may make a stupid (and expensive) mistake.
Loss aversion is a classic mistake. Making a lot of money is just as upsetting as losing a lot of money. Follow the precept: cut your losses and let your profits run.
A big win deranges your mind. Many people want to do it again and again so they make bigger bets. They then become losers.
Take time off after a big profit. Get your detachment and objectivity back.
Have you ever thought that you'd like to own part of a company? That's what happens when you buy stock; you become one of the owners. Your share of the company depends on how many shares of the company's stock you own.
You can make money in two ways. 1. The price of the stock can rise if the company does well and other investors want to buy the company's stock. If a stock rises from £5 to £6, the £1 increase is called a capital gain or appreciation. 2. A company sometimes pays out a part of its profits to stock holders; this is called a dividend. Sometimes a company will not to pay out dividends. Instead it keep profits and puts the back into the business
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