Stocks are a great way to make some great money. Theyre also a great way to lose a lot of money. You have to be careful. In the begininning when I first started investing I was pretty over zealous and decided I knew more about investing than I really did. I was cocky and ripe to get burned. Well I went on the ride of my life watching the stock I just invested my lifes savings in.
Ill never forget it, I put $20k down on a Chinese IPO and thought it was a sure thing indeed. Well it wasnt and the one stock that I invested in happened to be on an overall bad trading day and the stock went down just as quickly as it went up. I was lucky and only lost a couple grand(that was a lot for me at the time). I pulled out on the way down before it went down any further and then I mourned for two days(really just complained a lot).
I learned a few things that day that Ill never forget. One, the stock market is never completely predictable no matter what the recent past says. Second, never put all my savings on one stock. I learned this the hard way but Im glad I learned it early on.
Most new investors are like I was. Naive and ready to throw down all their money with full confidence in full expectation of grand returns. I cant blame you for thinking this way. However, this is exactly what companies and stock promoters want you to think. What do they have to gain from pushing this kind of mindset? Well there are good intentions and then there are monetary intentions. Of course they want their company to experience long term growth and benefit everyone but the desire to make more money always outweighs that motive.
Be forever cautious with your own money as no one else will be. You can make a ton of money in penny stocks or the stocks can make a ton of money from you. Learn the process and yes, "the game", in order to invest more safely.
There is no shame in playing the game of the stock market so long as you know what you are doing. So ask yourself this question before you start to lay down any serious money, do I know what I am doing? If not then it is smarter to delay until you do.
Author Resource:-
Scott Johns conducts research and analysis of stock market picks for a penny stock analysis company. To check out Small cap Stocks and Picks for some of his company's latest picks.
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