STOCK MARKET RULES

Research

To say that research is important to investing is like saying air is important
to breathing. The strange thing is that research is often overlooked by
the amateur and the professional alike. Instead they look for today’s
action. What’s moving? Where’s it going?
Ideally, the investor knows ahead of time what’s likely to be moving,
where’s it going, and why. To have a relatively small group of stocks that
one follows well is both wise and often fruitful. If following the group is
not fruitful, change the makeup. Find different stocks to follow.
Getting the basic information before the investment is made can do
absolute wonders for saving the investor money. A sudden price increase
should never be the only reason to buy a stock. An increase in either price
or volume might call your attention to a particular company, but also get
the background on what’s happening.
In recent times one only need look at the fortunes of WorldCom or
Enron to see the disaster that can befall an investor who has little or no
understanding of a company. There are still people who got burned on
both of these stocks who have very little knowledge of what the companies
did and what happened to them.
Do the research before you invest, not after.