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The stock market is a volatile animal but one you can tame if you want to. Millions of people have found their fortune on the market and even more have lost one or two, but in most cases this is because of poor strategy.
Setting some guidelines to stick to is a great place to start when you are trying to build a stock portfolio. The trick is to plan smart. Read as much as you can about latest trends and stock market basics. Then you can see what others did that make them money, from there you can set up your own rules to follow, rules that include the amount of money you want to put into the stock market. Stick to these rules and you are much more likely to see success in stocks.
For a good and versatile portfolio try to keep things spread out nice and evenly. This means no putting all of your eggs in one basket. Keep no more than 3 percent of your portfolio in any one stock. This is a simple rule that you can use to keep from losing your shirt in the stock market.
The better you spread the money over the stock market the better you spread the risk as well. When stocks dip you will be risking so little of your overall stock wealth that you will not need to panic.
Every smart trader has a line that they do not cross. This means not watching stocks go down and down just hoping and waiting for them to rise again. You must set a point at which you will sell. Pick a percentage and make a rule that says no matter what the stock is, if it gets to that point it is time to sell. You may take a hit now and then, but you will prevent losing everything you put into that particular investment. Too many stocks never recover and you do not want to find yourself having to deal with that time and time again. A loss of 15 percent is a good place to cut and run.
Never be afraid of success. Do you know how many people sell when things are looking good just out of fear that the bottom will fall out? It is a far better idea to take a bit of a risk and stay with the stock a little longer. Put your ear to the ground and do not get led astray by restless rumblings. This is how you will make the real money.
And when it comes to the stock market you must realize that the learning never stops. Because the stock market is always changing so must you. You need to be able to ride with the waves of the stock market if you want to be really successful with it. This means accepting losses and being willing to win big. Stocks are not for everyone but for those who have a passion for the game it can be well worth it in the long run. Just set your rules and guidelines early and stick to them come rain or shine.
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