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Investing In Stocks For The Sake Of Cash Flow

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Stock Investment Strategies

Posted on | August 18, 2013 | 6 Comments

Trading strategies for most experienced investors always involves technical analysis, years of experience, plenty of investment research in the stock market arena and knowing a thing or two about share prices. However, everyday investors are looking to protect their 401(k) or planning for retirement and are made to feel less important when investing their money on Wall Street in stocks or mutual funds. These types of investments are very serious business but do not have to be complicated.

Of course trading stocks online is affected by a wide variety of variables. And needless to say that all trading strategies have to adapt according to the conditions of the stock market. However, when you follow these simple rules for buying stock you can improve your chances of wisely investing your hard earned money. The most common trading strategies are often the most effective.

Always buy stocks you know about. Every investor has their own trading rules and strategies for buying stocks which are usually based on risk tolerance and on personal goals. Every investor also buys and sells their stocks as well as mutual funds based on what appeals to their trading sense. Right?

Not always. The most common problem is that most every investor falls prey to fads that are on Wall Street and become eager to buy the most popular stocks that every other investor is buying. This is how newer investors become victims of the tech bubble when everyone piles on and buys popular stocks that have not even made a profit yet for most of them.

Think about websites that give the sales pitch that their special currency can be used in place of credit cards. This is a ridiculous concept but for some reason these websites made profits between $40 million and $50 million from stock investors and even managed to get a few of the retail giants. However, in reality these websites were no more than gift card companies. Most of these websites went bankrupt after several years.

On the other hand there are companies like Amazon.com with their Kindle e-reader that were celebrated as having created a revolution in book publishing. Those that celebrated them were right since Amazon stock is on the rise by as much as 130% in the last 4 years.

Always follow your personal experience. If you see that consumer trends have products with huge potential no doubt there are others that will as well. This helps you to anticipate current investment trends and make a nice profit from them instead of listening to the chatter of popular stock picks.

Always beware of the many pitfalls that rely on personal tastes. While it is always priceless to have outside perspectives be sure you are on the right path. If you feel you need a second opinion consider consulting with some of the bigger traders on Wall Street. They have been there and done that and have not only years of experience but have also suffered the many pitfalls that are common in trading stocks.