Here what I write might surprise many readers. Many readers would have come across "Stock Market Systems", Computerised Systems, proven systems, get-rich quick systems and Margin Maximising System and more. My stock system is based on very basic observations and common sense logic. Therefore, after reading this, many of you will certainly agree and dispel the myth that it is hard to invest (therefore Unit Trust sellers will use this excuse to bring you to their unit trust subscription system similar to insurance agent's strategy) OR it is very little returns (and thus the Automated or Trading Seminar sellers will use this to bring you to their paid system).
My stock trading system or Rules are:
Rule 1) Make an educated research on the stock you want to invest. Then invest in it.
Rule 2) You won't make a loss because your goal is to sell when the price is higher. If the price dropped, you are still invested in it because of the believe you had from Rule 1.
Rule 3) Buy the stocks that you have been using the products/services they produce and you have used and respected them. Example, if you feel great about Honda cars, and believe they are reliable; buy Honda stocks. You enjoy the casino(!), therefore buy Genting Singapore shares. Starhub has been your internet provider for years and you like their service, then do buy their shares. In proviso, after you done a due diligence based on Rule 1. Investigate, research that company.
These are the fool-proof methods that I deploy for my stock picks. Many average man-on-the-street and woman-on-the-street may have a cautious approach when they first invest in stocks or contemplating investing. They will hear stories likening the stock market like a casino, and many many people losing their savings and stuck in debt or even declared bankrupt.
These situations happened because those who did it really did it like a casino. With very little research they might buy a stock without knowing why, just assuming the price may increase in 2 days. And second mistake, using Margin Trading - something which is similar to a credit card! You're buying on Margin or on Credit. Third, they will sell when it is not "making money" - thereby assuming cutting loss. But if they had the right mind to have a Rule Number 1, this cutting loss situation would never arise.
Therefore, the conclusion is stock market investing is a very safe and efficient way to increase wealth. It is the quickest method to "start a business". You practically own Singtel when you bought Singtel. You don't have to worry about employing staff. Nor rental. Nor security. Nor locking the shop. Or innovating new phones.
Comments, suggestions, thanks welcome.
Yesterday (4th October 2010) Google Adsense reported a first click with 92 cents earnings. All of these earnings will be donated to a Charity. If you have a charity to suggest, kindly inform me. My current choices are SVDP (Saint VIncent De Paul Society), Tzu Chi, and Kiva.org. Will be writing more about them and how I will channel all these ancillary ad revenue to these charity.