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.
