Most of the money at the end of a year is spent in the form of stocks and bonds.
How do you calculate how much of your capital should be invested in stocks?
If the stock price is 50% over target, then you should invest 25%
If the stock price is 50% under target, then you should invest 50% of the remaining money.
In stocks you would invest in your personal stock, for a specific company.
If your company offers a low-risk, high-return investment, in stocks you might invest more.
Where should you buy shares?
In most countries stocks are sold in large volumes at low prices. There are no rules which can be considered “trickish”.
Where should you buy your shares? In most countries it is recommended you buy your initial stock in the morning and buy other company shares in the same day, to diversify between different companies. If you are holding stock in multiple companies, this is an idea to consider, as it will allow you to see your share price in the market in general, rather than individual companies.
There is no rule requiring you buy shares in just your main company, the rules usually apply for all companies. If you have a business in two or three companies and feel that a particular company will benefit the most from a takeover, it is better to wait a little while and make a deal with that company.
Your investments should not be in just one or two companies in most countries. The best way to diversify your investment is by buying additional shares of companies which are more than three years old.
Why do you invest in shares in companies?
This is done to be able to predict the future. If stock prices go up you can be sure of a higher profit.
If your investment in stocks does not make much profit, does not go anywhere and is not going to change your life much, or even if you make money, you do not need to buy shares, just hold the value.
How do you buy shares in a stock market?
Buying stocks at a discount is not very easy. Some investors believe in “the law of momentum” and think if stocks are going up they are worth buying for just a very small price. That is a very stupid theory, because when it is time to buy, the prices go down.
If price goes down a lot, many people will
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