Are You A Stock Market Investor?

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Are You A Stock Market Investor?

• This is an important question to ask yourself before you decide to embark on the journey as a stock market investor. Depending on your personality, investing in the stock market may not be the ideal investment vehicle to reach your financial goals. Here we will endeavor to uncover some of the qualities you should either posses or develop to have any measure of success in the stock market.

• Sure, you may have heard wild stories about someone who bought shares in some company for $5 a share and sold it soon after for $50 a share but such stories are mostly a myth. While this dream scenario may have happened once or twice it is not a common experience for most investors.

Before becoming an investor you should consider the following

points:-

1) Are you a self-disciplined person?

• The first thing you need to do is evaluate your personality type. Do you think objectively or in an organized manner?

• Do you realistically have money set aside to invest with? Do you generally set objectives and goals in your daily finances?

• Do you routinely set savings goals and follow through on them?

• A successful investor needs to have a clear set of objectives and goals for choosing investments.

• Is your investment pool a one time wind fall or have you saved in preparation for your investing?

• Do you routinely set aside some disposable income for investing?

What you will be doing when investing is transferring some of your bank savings to an investment account. Are you able to maintain your savings habits to include a regular stock market investment? If you usually earn a small amount of interest on your savings account what rate of return are you expecting from the stock?

The key is to know what disposable income you currently have for investing and don’t invest money that you can’t afford to. Your investment dollars must only come from disposable income.

Are you able to set goals and listen to good advice?

After you determine that investing is right for you then goal setting is the next important step. A goal is the objective of your investment.

Your investment goal may be a vacation home, an emergency fund, or perhaps part of your retirement plan. This goal is what determines the type of investment that is the best fit to match your desired outcome. If your investment goal is a long term one such as retirement you may seek a tax exempt municipal bond fund or a mutual fund with certain advantages.

All major fund companies have consultants and managers. When deciding on a fund that will fit your investment needs it is important that you listen to advice and make a decision on various alternatives offered by these consultants. After you have evaluated all the options available you can then make a final decision based on the best investment to reach your goals.

Can You Let Go?Perhaps the most important part of deciding if you are a stock investor is, YOU. Once you have gone through your goals, self analysis and research; then your final decision and next step is critical. Do you have the personality to allow your investment to run its course?

Can you sleep easy at night? You need to be able to take the losses with the gains. You also need to be able to trust your instincts and review your investment on a regular basis. It’s also wise to place a limit order on your account too so your broker can sell if the price goes down if you buy individual stocks.

• Mutual fund investments are different than buying individual stocks. If you’re satisfied that your fund has met your investment criteria then let it run and review it less often.

• If your mutual fund suffers any unexpected long term problems then you can simply change funds. A good rule of thumb here is to review the fund every quarter and discuss any concerns with the fund manager or representative.

To be a successful investor these are the personality traits that you will need.

If you do have them you can achieve a lifetime of success in the stock market, otherwise it may be best to try another type of investment.

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