Here is a small portion from the book “Stock Market For Dummies PDF”
Basic Rules of the Stock Market You Should Know
As an investor, you must not treat business with sentiments. Business is strictly business and nothing less. Sometimes you may get stock with a company which is either familiar with you or your business brand, but that is not enough to make you patronize the company.
Even if the company produces your favorite products or pays homage to you as regards corporate social responsibility, having been situated in your locality, it is still not enough to make you buy stocks from the company.
What will make you buy stock from the company is the strength of the company. The company should be a strong. If your favorite company is a strong one, then that could be your determining factor.
In order to make wise decisions as regards the company to buy your stocks, you have to consider these basic rules:
“Stock Market For Dummies PDF”
- Focus on the price of stocks – As investors differ in their needs, so do they differ in the choices they make about what to invest in. However the choice of the price of stock is one thing they all have in common. Stock traders could benefit from even a weak company (even though the profit may not be much), as long as the stock price promises some profits if properly timed to determine when to buy and when to sell off.
- Maintain the liquidity of your stocks – You have to ensure that your stocks are traded actively so as to avoid being stuck due to the unavailability of traders on the other side who would buy your stocks. You have to stick to tickers worth $50 or less as most traders are distracted by the requirements to maintain the liquidity of tickers worth over $50.
- Practice before you set off – It is always advisable to stay on the sideline and monitor a few tickers to find out their trading price range before venturing into the larger market. It can be difficult to predict what the stock market is going to do next. You could be in a bull market or bear market.
For more info about the stock market https://www.investopedia.com/articles/investing/082614/how-stock-market-works.asp