As usual, when I started earning in the US, I succumbed to the lure of the temptress called Wall Street. Over the years after experimenting with it, here are some of the few things I learnt:
(1) Just because you love the technology you work on, dont think there's a great market for it and the customer base is enthralled by it, especially if your customer is not the guy on the street. This is something I learnt abt, after buying stocks in companies like Lucent, Cisco. Basic principle.. nobody will change the plumbing lines unless its broken.
(2) Buy stocks of companies whose products everybody digs and are happy with.. (eg.) Google, Apple, Amazon. The fact some company is an industry leader means something.
(3) Timing matters. Track stocks for a while, look at the circumstances under which the stock is at a low price (it shud be more because of the whole market being down like recession etc and not because of the company).
(4) Exit when the going is good.
(5) Gold, Oil and other natural resources are always good to invest in. Again, buy when the trend shows the price is not at its highest but somewhere towards the lower end. Your investment should be on something that will hold value forever.
(6) Nobody has the time to watch stocks. So, do check out the index based mutual funds.
(7) Go international but watch the international market.
(8) Dont park your money in checking account. Sometimes, its actually not a bad choice either. Invest only when it makes sense or you are better off having it in checking acct.
(9) Always think long term. If you think you dont want to hold something for long, then its definitely not worth putting money into in the first place.
(10) Periodic investments will pay off and take advantage of the law of compounding returns.
(11) Keep your operating cost low.
(12) Last but not the least, do thorough research. Dont go with hearsay suggestions.
These observations holds good if you are especially a lazy investor like me.
No comments:
Post a Comment