Question:

What should a stock owner be worried about?

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What should a stock owner be worried about?

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  1. you picked an excellent time to ask this question.  Probably about 99% of stock owners are now worried.  What they are worrying about is how much further the value of their holdings are going to fall and if they will ever recover back up to the price they paid for them.  They are also worrried if they should sell everything and cut their losses.   Should they be worried?  They don't have any choice in the matter.  If you are loosing money, you worry.


  2. Losing money... Or do you mean, what to be worried about with the news about the company you've invested in? I would watch its charts, and see how it has done in the past, and if it has ever sank from the current price at which you bought it, in the past. Just watch for negative trends. Here are some sites to take a look at.

    www.247wallstreet.com

    www.thestreet.com

    www.dealbreaker.com

    www.timothysykes.com

  3. Natural disasters, alien invasions and rabid dogs. These can all have adverse effects on stock owners.

  4. I wouldn't say worried, but concerned. As an investor, you should be concerned that you are following your own rules when investing. It is also good to fine tune every now and then, but not to justify a losing position.

    Hope this helps, and good luck!

    Jim http://jsforex.blogspot.com

  5. Visit for more information - www.digitzip.com

    Investing is not just about picking winners, but also about avoiding mistakes. Retail investors can be better off if they avoid making the following mistakes.

    Overconfidence - Don't be unrealistically optimistic

    A bull market makes retail investors believe that they are geniuses - after all, anything they put money into goes up. This overconfidence in their own abilities leads to a complete disregard of the risks involved. Every new generation that invests in the market ignores past experience. These new investors wrongly believe that stock prices only go up.

    Don't be overconfident and don't start believing that you have superior skills compared to the market. Recognise that in a bull market you are benefiting because the whole market is going up. If those around you are getting unrealistically optimistic, start managing your risk accordingly. Remember that sometimes markets do come crashing down.

    Over enthusiasm to trade - Not every ball should be hit

    Good batsmen realise that some balls outside the off-stump should be left alone. Similarly, professional investors realise that sometimes its better to just stand still than to rush into a stock. Retail investors often make the mistake of "flashing outside the off-stump" because they cannot resist the temptation to trade in every opportunity. And, like an inexperienced batsman, they suffer the same fate.

    Too much trading will lead to a lot of churn, extra commissions to your broker and huge tax implications for you. Some of the world's best investors follow a buy and hold strategy - you should too.

    Missing the benefits of compounding of capital - Learn from Einstein

    Albert Einstein is reputed to have said that compounding of capital is the 8th wonder of the world because it allows for the systematic accumulation of wealth. Even though any one in class 5 could tell you how compounding works, retail investors ignore this basic concept.

    Compounding of capital can benefit you only if you leave your money uninterrupted for a long period of time. The sooner you start investing, the bigger the pool of capital you will end up with for your middle-aged and retirement years.

    Don't wait to start investing only when you have a large amount of money to put to work. Start early, even if it's with a small amount. Watch this grow to a very large amount with the passage of time.

    Worrying about the market - But there is no answer to your favourite question

    Smart investors don't worry about the direction of the market - they worry about the business prospects of the companies whose stocks they own. Retail investors are obsessed with the question "Where do you think the market will go?" This is a wrong question to ask. In fact, no one knows the answer.

    The right question to ask is whether the company, whose stock you are buying, is going to be a much bigger business 10 years from now or not? Don't take a view on the market, take a view on long-term industry trends and how your chosen companies can create value by exploiting these trends.

    Timing the market - Around 99% of investors will fail in this strategy

    Its very difficult to time the market, i.e, be smart enough to buy at the absolute bottom and sell at the absolute top. Professionals understand that timing the market is a wasted exercise.

    Retail investors always wait for that elusive best opportunity to get in or to get out. But by waiting they let great investment opportunities go by. You should use systematic or regular investment plans to make investments. You'll have to make fewer decisions and yet can accumulate substantial wealth over time.

    Selling in times of panic - You should be doing the opposite

    The best opportunity to buy is when the markets are falling and there is fear in the minds of investors. Yet, many retail investors do exactly the opposite. They sell when the markets are falling and buy only when the markets are high. This way they end up losing twice - by selling low and buying high, when they should be doing exactly the opposite.

    If nothing has changed about the long-term outlook for the company that you own, then you should not sell this company's stock. Use this opportunity to buy more of the same stock in falling markets. Some of the world's biggest fortunes were made by buying when others were selling in panic.

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