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Sunday, July 24, 2011

10 simplest and effective investment tips

Majority of the newbies who want to invest their money into stocks always want to know some of the very basic and simple investment tips, which they can easily understand and which are simple yet very effective. Then they ask their circle of friends about how to start and are guided that go with some money management companies as they have professionals with experience in investing money.

Hence they fall into trap and their interaction with investment company is only at end of the month when they have to give monthly emi for investing to the company, In such a way they never come to know about the very investment tips which otherwise could have saved them lots of middleman money being paid to the investing companies as fees.

So in this post I would put some explanation in 10 simplest investing techniques, which can be understood by any newbie. These are simple tips but yet they are very effective investment tips.

So 10 simplest and effective investment tips are as follows:

1. Keep it simple - for beginners the most inportant investment tip is to keep their investment simple, donot diversify too much which you cannot manage, always invest in domain which you are slightly known too.

2. Start with good companies - Always start your investment by investing in superior companies which have proven track record and excellent top management. believe me in such companies chances of making loss is minimised then any other risky company.

3. look past 2 years report card - before investing your money always snalyse past two years of trackrecord of the company, Flourishing companies would find new ventures in the field of investments that would help the investors to reap a good profit. Give credence to the companies who are planning to expand in new lines of business.

4. Invest when market is selling - The best time for investing your money is when the stock market is in doldrums, most of the legendary investors have made huge profits just by purchasing when rest of people were too pessimistic for investing their money.

5. Calmness and compose is key - Stock markets across the globe have only two seasons bullish and bearish, If you have invested your money and the season changes to bearish, then be calm and compose and donot sell your stock at throw away price, just wait for next bullish season and make profits, Just invest your extra money which doesnot effect you in time of crunch.

6. Have a chat with professional often - A newbie should often chat with a professional investor for getting an idea about the present market conditions and come to know where the market is heading. It helps a lot.

7. Invest where you find value - There is a great difference between a good company and good investment is the price that you pay. There are many good companies but very few among them have a strikingly priced. When you look for stocks getting a high quality company is half the job done the other half is to invest on a rightly priced investment.

8. Check past of company - Always check and analyse past performance of the company where you want to invest your money. But you too need to be aware of the fact that past performance should not be the parameter to judge a company while investing.

9. Invest in safer stock - Always try to invest in safer stock to safeguard your investment. less returns are good if it is sure for some profits, try investing in government bonds and PSU's as they are the safest option to invest.

10. Invest in what you know - Always prefer to invest in sector with which you are slightly familiar, dont experiment too much and also donot follow anybody blindly.

Hope these 10 simplest and effective investment tips will help you in making your next investment.
Do spread the word about my blog if you find it really helpful.
For more free investment tips Stock investing tips . You can also start with following investment books for beginners

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