Do you remember when you first become interested in investing, who do you go to talk to to get advice? I bet most of us talk to the people around us, our friends. Friends will tell us a lot of opinion on the market. These are some common words we hear from our friend's mouth
"This is a great stock, look at it, 10% jump in price in few hours"
"This is a great time to buy, it just drop 20% over last few days"
"It can't go any lower"
"It can't continue to go up and up"
You know what I mean. Friend give a lot of judgement and it's dangerous if we listen to them. Especially when you first start out and you don't know any better. I remember, some of the terrible stock investment I ever have is because I listen to a friend who sounds a lot smarter than me. I follow my friend's "advice" and my money get burned out quickly. Instead, if we''re determined to become a serious investor and make a fortune, we should get our education in the right way. We have to study the market, it it moving up, down or side way, how it does in the past, what kind of pattern can you recognize, beside the price, what other data you should look at to increase your confidence level, etc? Listen to the trend you identity and follow it to capture your profit. If you make a wrong move, at least you learn something along the process and next time you know the mistake and you can learn to avoid it.
Tuesday, January 15, 2008
Listen to the TREND, don't listen to your FRIEND
Posted by 529pm @ 11:19 PM
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3 comments:
What do you think of the recent downfall of economy? Seems like a lot of investors have lost their faith at the market and the Fed came to rescue a little too late. How long would this last? If a recession is approaching or maybe it's already here, how would you change investment portfolio? Your opinion will be greatly appreciated.
Interesting topics.
:)
No action is probably the best action at this moment. No market continue boom or bust forever. Since U.S's economy has experienced boom for the last 5 years, I think a correction or even greater magnitude, a recession could happen. However, unlike the recession we saw in year2000 when high tech bust, governemnt is pumping out lot of money to help the economy. It's hard to guess the direction of market. I will not make any significant investment in stock in next few weeks. I will carefully watch the price and volume action to determine where is the market going.
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