Posted on 18 August 2011.
In a wild and volatile market with drastic price swings, sound stock market investment advice is more valuable than ever. Yet, despite the stock market’s volatility, investors stay in the game. Some are hoping to strike it rich, while others would be satisfied with a steady increase in portfolio value. Even during tough times, the keys to success are sound fundamentals and consistent trading practices.
Chaos produces fear in the market, and during times of extreme volatility, many investors panic and start selling their portfolios. Historically, however, these chaotic times are when the best market days have taken place.
An addendum to the stock market investment advice is not to panic during uncertain market swings is not to trade too frequently. Studies have shown that investors who trade higher than the annual average consistently earn less. Over time, this practice can result in a significant loss of potential profits.
Along these same lines, those investors who try to time the markets do not fare well, either. Stocks will not always perform as expected, or even as they have in the past. A long-term approach metered with common sense and solid research has proven to be the best strategy.
This does not mean ignore the warning signs of a poorly performing stock. Instead, it is imperative to monitor stocks to ensure companies are using sound business practices. Not taking on excessive debt, maintaining plentiful cash reserves and investing in the business for a profitable future are chief among these.
More than any other investment advice, doing proper research before buying a security is vital to success. If the stock is backed by a solid business strategy with sound management practices, the odds are good the price will soar eventually. Do not panic after hearing unreliable stock market investment advice, sell, and miss a potential blockbuster day.
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