You may find this helpful in your journey to Stock Market Investing.
Be open. Don’t be too intelligent. Don’t wander away thinking you’re better, wiser, and luckier. Have an open mind and use all the tools that may help you and disregard those that doesn't.
Lesson on Diversification
By Mike Viñas, writer, Stock Update
I’d like to talk to you about a principle that I believe will be helpful in our investing in the stock market. That principle is: “Don’t put all your eggs in one basket.”
I’m sure you’ve heard this phrase countless of times before. It’s an idiomatic phrase that means one should not focus his or her resources solely on one thing—whether it be an opportunity, an avenue of success, a person, an investment, etc. If that thing that you place all your bets on fails you, then you’re left “broken”—left with no eggs. This principle applies to a lot of facets in life (investing, farming, decision-making, etc.) and it prompts us not to pin our hopes in one course of action, but rather have several options to ensure success.Join! the Truly Rich Club of Bo Sanchez.
Now, this holds true as well in the world of stock market investing. In this realm, such a principle is called diversification. Similarly, diversification is a technique that lessens risk by allocating investments in a variety of financial instruments, industries, companies, and other classifications. The goal of diversification is to maximize profit by investing in different avenues and have several vehicles of growth. This is an important component of reaching long-term financial goals while keeping risk at a minimum. For example, consider an investment that consists of only one company’s stock. If that company suffers a downturn, then your whole portfolio will be affected negatively. It will feel the full brunt of the decline. However, by splitting your investments in several stocks, in different industries, you can reduce the potential risk to your portfolio. This will also ensure you with steady long-term growth for your investment.
This gives you a good protection against risk, consistent growth for your portfolio, and a greater potential profit at the end – LONG-TERM STOCK MARKET SUCCESS!
So keep on buying every month and don’t just buy only one stock. Invest regularly with several SAM Stocks so that you will be diversified.
Receive Stock Updates like the one above by Mike Viñas a Corporate Accounts Officer and Relationship Manager at CitisecOnline. He is a Certified Securities Representative and a Certified Investment Solicitor.
Like us on Facebook
Follow me on Twitter
Photo Credit: StockMarketForPinoy.com
No comments:
Post a Comment