Introductory Stock Tips

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By Ian Lenny


The title of this article is a little misleading. This article has no inside information that will give you an unfair advantage in the stock market. Our apologies. However, we would like to provide you with some of the basics that you need to consider when investing your money. These stock market tips are intended to familiarize you with the only investment strategy you should concern yourself with when first considering putting your money in the stock market. This article will be more useful for those of you who want to build their wealth in in the long run. For a greater perspective on day trading and intraday stock tips consult the article on stock market trading tips

Over the long term there has been no better investment to make in order to keep the value of your money increasing well past the historical rate of inflation then stocks. Since WWII stocks have more or less consistently beat the historical inflation rate which is just above 3%. Stock prices over the long term basically track the development and behavior of the companies they represent. If a business has increasing revenue over the long term, its stock prices should also increase. While additional factors affect a stock price temporarily, the success or failure of a business is the sole metric that truly mirrors stock price over the lifetime of a company. Therefore it is important to keep in mind that the market will eventually predict stock values and that this concept does not work in reverse. So you should not get caught up with the everyday fluctuations if your goal is to be a value investor.

There are many outlets for free stock tips, just as there are lots of places for making low cost trades. The trouble with this is that it promotes day-trading by inexperienced and unqualified traders. The only people that should be involved in day trading are the ones that have a significant amount of time and money to lose. A good analogy is the person who decides to pick up Olympic weightlifting to get into shape. It would be far easier and less time consuming to adopt a simple routine of resistance training then to learn a highly skilled type of barbell training such as Olympic lifting for 99% of the fitness minded population. So if you wish to begin in day trading or Olympic weightlifting we would strongly recommend that you seek an experienced coach. In this case may I please recommend Phil Town. What I like about his book is that he presents an easy to follow precise system that is based on value investing.

For 99% of investors they ought to take the value investing approach where you asses key aspects of the business you are investing in. The advantage to this method is that you can assess widely available and easily understandable information regarding your target company. A general understanding of the business you are interested in is a good enough starting point. Do you understand the market the business is operation in and the other key players in that industry? Is the business primarily positioned for growth or maintenance of its position in the market? These are the questions you need to ask yourself and have answers for before investing in any company.

Even with a long term value mentality it is still necessary to re-evaluate your position on an ongoing basis. For most value investors this means at least once a year, but more often than not once a quarter. The best tip anyone can give you when getting into executing manual investments is to start out with value investing. It will give you the best overview of the market and prepare you with a basic understanding of the market that will allow you to further research and understand more dynamic, complex investment strategies.




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