Investing in stocks…your ignorance is someone’s gain
One of the greatest risks one can take in life is forcefully trying to be part of a club one does not know how it operates. The same is applicable to the capital market; you cannot stake your money in a market where you have little or no knowledge about. Isn’t that pretty risk?
When the stock market came suddenly under pressure from all angles, finding workable strategies work became a bit difficult for market players, operators and regulators.
Even at that state, there were still smart people whose job it was to figure out how to make money in any state of the market. Without prior knowledge of the market, the money you would lose in the market becomes their gain. The stock market can go down as well as up, but experts recommend that if you are interested in investing your own money in the stock market you need to educate yourself to the highest possible level before you invest. This is because investing in the stock market is not in any way so easy but a process that is based on Fundamentals.
“There is no easy money in the stock market. It does take hard work. Anyone promising instant riches in the stock market should not be believed. There is considerable risk of financial loss if you do not know what you are doing. Have a risk management strategy in place. If in doubt do not invest”, said Barry Moore, an analyst at Liberated Stock Trader.
“No matter what the con-men, penny stock newsletter writers or gurus tell you, I can really tell you this. There is only one way to make money in the ‘share market/stock market’. Education!”, he added.
But if you really want to make money in the stock market and understand why and how the market moves the way it does, you need to understand the Fundamentals. These include the business climate, market cycles, economics, monetary and fiscal policy, and the role of the government and central bank in the fate of the stock market.
“Combining a solid knowledge of the fundamentals of business economics with technical analysis is the key. Only then can you understand if the business climate is worsening, what effect it will have on the stock market,” the expert added.
“There is a combination of tools that works. Once you have a grasp of why the market moves in a certain direction (Economics and Governments), and an understanding of the way it moves (Cycles & Waves), then you can interpret charts (Technical Analysis) in a whole new way. Understanding ‘Supply and Demand’ within a given economic climate is critical. Then we can combine Price, Trends, Volume and the Price Volume relationship to give us something akin to a true visualisation of what may happen. This will put you in the top 5 percent of stock market investors,” Barry added.