Some Stock Investing Tips

Stock investing strategy and specific guidelines if established and maintained properly can provide you high returns in mid to long term basis. Below you will find some of the useful stock investing tips.

1. Avoid investing in low market capitalization or low price stock probably stocks price which are lower than $5. The reason behind avoiding investing in these stocks is that maximum of these stock does not have good financial earning background. As it is know than earning is one of the main factors that drive the stock price up, if any company is not making any earning then it is always good to avoid making any investment in such stocks, no matter the price of these stocks are low.

2. Make investment in stocks (companies) which you know very well and has huge customer base with good financial history and great prosperity ahead for that company. Look around and you will find great investing idea.

3. Avoid making investment in only one stock; diversification is strong mantra in stock investing. Diversify your investment in few stocks maybe at least 2 to 3 stocks rather than only in one stock depending upon your investment budget.

4. Averaging stock is good stock investing strategy; you can also call it as systemic investment plan.

5. Invest only part of your money in stock at initial stage and increase them gradually once you are comfortable and become knowledgeable how stock market works.

6. Become value investor and invest your money in stock when there is massacre going on in stock market. Many stock market investors become panic and sells their stock at any price when there is massacre going on in stock market and this is stage where value investor emerge and find out highly appreciable stocks at low price and picks up them. Buying stocks when there is massacre going on in stock market require huge guts and deep understanding of stock which you are going to hold.

7. Know the difference between stock trading and stock investing and plan out your strategy according to it.