Investing Advice

Poor Stock Buying Decisions

  • Buying in a Bad Stock Market
    You don't have the patience to wait for the next bull market to take off. You feel that you're smart enough to outsmart the market. But a weak market doesn't care about you and your superior stock picking. Too many of even the best stocks fall when the bears are roaring.
  • Bottom Fishing
    You can get hurt trying to catch a falling knife. When greed takes over, many make the mistake of scooping up stocks at "bargain-discount" prices, then watch them continue to fall even further.
    • Just because a stock's price is low, way off its historical high, doesn't mean that it's "On Sale". Don’t dumpster-dive!

    • Buying Too Late
      You've researched a company, all the fundamentals are right. The stock price is going up on heavy trading volume, but you feel that you've missed your opportunity so you decide to wait for the price to pull back.

      But it doesn't - it keeps climbing higher. Now it's up 25% since you first confirmed that it was a good buy, and you jump in, just in time for it to pull back 10% kicking you out.

      Your indecision cost you money, when your investing skill should have been making you money.
       

    • Failure to Buy Stock
      Same scenario as buying too late, but you watch the big run-up without ever buying. Fear beat you.
       

    • Listening to Strangers – Stock Buying on Tips
      The internet has thousands of hot tips from both well-meaning persons and also those who are "pumping" a stock because they want to dump theirs at a big profit.

      Every stock market investor in the world is ready to bend your ear and share his secret hot stock. Tips are for restaurants. Read the annual report. Figure out exactly what the company does and what its true prospects are. Don't think that someone else will do all the work and hand it too you.
       

    • Capitulation, calling it quits
      When the market tumbles, many investors that held on to their losing stocks or mutual funds for the ride down, finally sell everything out of fear. When all the sellers throw their hands up, the market has bottomed and is ready to go back up.

      This is when you should have your cash ready on the side, ready to begin buying as the market proves that it’s rolling again.
       

    • Guessing on an Investment
      Acting on hunches is gambling with your money. It is not only risky, but it is reckless and stupid.

    “you get to the point where it’s not winning that matters, but avoiding losing”

    Jack Bogle, Founder of the Vanguard Group

    Other Stock Market Basics Topics:

    1. Stock Market Investing – the Right Way
    2. More Stock Marketing Investing
    3. How to Pick Winning Stocks
    4. The Golden Rule of Investing
    5. Avoid Psychological Traps to Have Successful Investing
    6. Changes in Stock Values Can Be Big Numbers
    7. How to Invest Smart
    8. Stock Advice - Important Selling Rules
    9. Poor Stock Buying Decisions
    10. Market Indicators
    11. Stock Market Cycles
    12. When a bear stock market may not be a bear market
    13. Stock Index Futures
    14. Four Things that Affect Stock Valuation
    15. What is a P/E ratio?
    16. Value Investing
    17. Cheap Stocks
    18. What is a Financial Statement?
    19. Analyzing Financial Statements
    20. Stock Market Tip - Red Flags to Look For When Investing?
    21. The Annual Report – How to Read
    22. Stock Market Analysts – Stock Market Advice and Tips

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