We did it! After seven tedious days, the conclusion for this stock market activity has finally arrived. From moments of elation to times of desperation, this activity has certainly had a volatility all it's own. Here are a few things I have learned:
1). Wait it out. Even though only a week has gone by, I have witnessed plenty of incidents that exhibited the unpredictability of the stock market. One day may seem like the end of the world. Then again, another day may appear impossibly fantastic. Selling during the latter option would probably be preferable.
2). Do your homework. Before investing in any stock, examine its past history. See if there have been any aberrations lately or any successes. Surprisingly, a lot can be learned from a few simple searches. While being based on whimsy could work, it is far from rational. Knowing what one is investing allows for precautionary steps to be taken.
3). Delve into different market sectors. By diversifying, stocks are garnered from a myriad of sources. If one sector begins to fail, there are other sectors to fall back on. Also, not only does diversification act as a safety mechanism, but also an opportunity to experience success across the economy. If earnings rise in a particular sector, it is beneficial to have placements in that sector.
4). And lastly, have fun. Putting too much emotional investment into the stock market will inevitably lead to personal hardship. Even the big shark investors have bad days--we participate in an economy, not an idealistic utopia. The ability to shrug off losses and to remain optimistic is probably the most important lesson of all.
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