How to Buy Stocks Online The Smart Way

By Justin R Brown 

Today there are several methods of investing available to every customer. Investing in stocks is just one of them. Stocks give you an ownership interest in the company which is issuing or selling the stocks. Stocks are also known as equities. There is no fixed or objective value to a stock. A stock is only of as much value as the person holding it perceives it to be. While investing in stocks is a very lucrative, there is also a lot of risk involved in investing in stocks. With the advent of technology, it has become all the more easier to buy stocks online, and you don't even need to be an expert to know how to buy stocks online. Buying stocks online is relatively easy once you have researched well the stocks you are interested.

The basic steps to accomplish this process are as follows:
1) Educate yourself by researching fully about the stocks you are interested in before purchasing them. Information about stocks can be found on the Internet on several websites.
2) You might want to hire an online broker who will help you determine which stocks to buy. It is often a good idea to let a broker buy the stocks for you based on what your requirements are. Many broker firms will request you to fill up an application first. Such forms are also available online itself. However, an online brokerage account is convenient and fast but can be prone to computer glitches.
3) While buying stocks, will price be the only consideration? Do you want to buy and sell stocks only or do you want to further expand your options to include mutual funds or foreign stocks?
Success in buying stocks online comes from being able to see the big picture and from paying attention to the small details. However, online stock trading can become a very difficult and life consuming business if you have no idea about what you are doing. This can also cause you to lose a lot of money as well as time. Therefore, it is a good idea to first learn properly how to buy stocks online, trade with play money and only then invest real money into it.

Article Source: http://EzineArticles.com/288817

Investment Basis: What To Invest In 2012

By M. Cunningham 

When it comes to making long range investment goals for your future many first time investors want to jump in head first without having any prior knowledge of what they are doing. Eventually and unfortunately many of these investors never become successful investors and usually just give up. Investing in itself does require some level of skill and it takes time coupled with your ability to learn.
It is important to understand and remember that every investment that you make is not a sure thing in itself. There is always a the risk of losing money. However, your risk can be minimize if you take the time to learn and know when to take a loss and run! Before you dive in head first it is imperative to not only find out more how the investment game works, but to determine what your investment goals are.
The questions that you should ask yourself before taking the plunge are, what are the reasons that you are investing. Are you investing for long term or short term reasons? What are you trying to achieve with your investments? Are you investing for your children college education? Your retirement? A vacation? Buying your first home, etc? Before you part with a single red penny, think about these questions and write down what you hope to achieve by investing. Knowing what your long and short range goals are will help you make smarter and wiser investment decisions for you and your family.

All too often people invest their money with pipe dreams of becoming an overnight millionaire. I have been there too! I am quite sure that it has happen for a few people, but overall those types of opportunities are rare indeed. It is not a very good idea to start your investment portfolio with unrealistic dreams and goals of becoming rich overnight. It is always best to invest your hard earned money in such a way that it will increase slowly and safely over time where it can therefore be used for a child's education or your retirement, etc.
Another strongly advised decision would be to talk with a financial planner before you make an investment. A financial planner can guide you in the right direction and help you determine the type of investments that you are looking for that will help you reach your financial goals that you have set. He/She can give you a realistic overview of the type of returns that you can expect and how long it will take to reach your specified goals.
Again, remember that investing for your future will take time and effort and your willingness to learn. Never entrust your financial and investment future to someone else. You must also do your due diligence and learn investment strategies for yourself as well. It will take your delving into and doing your research and acquiring knowledge about the stock market and other types of investments if you hope for your investments to be successfully.

M. Cunningham Is the owner and webmaster of Investment Top Tips. You will find lots of information and investment advice and tips plus loads of FREE products.

Article Source: http://EzineArticles.com/6795970

Where To Invest in 2012

By Dale Poyser 

With the coming of the new year it is time to look back at what worked and what didn't work with your investments. With the high level of ups and downs in the global markets, here are your keys to success for 2012 if you are serious about wealth creation.
Look for low risk strategies.
First and foremost, steady does it in the game of building wealth. In certain markets, it is OK to swing for the fence on every try, but eventually this will catch up to you. In a volatile market that moves around a lot, a fast moving investment strategy can quickly go against you if you hold onto it too long.
Take the approach of a marathon runner and look to make returns on low risk strategies. Ideally look for strategies that will allow you to build wealth by generating passive income payments on a periodic basis. I look to make returns on my investments at least once a month. I currently target 10 - 15% per month in the stock market although I could easily make this 20% with some added risk. As I get older I'm all about low risk, conservative gains. You should do the same with your investments if you really want long term success.

The stock market has had a nice run up in the last year (2011) so my guess is that it may be due for a correction. You might still be able to do OK in the stock market if you go for stocks that have not had huge runs but pay big dividends and are profitable. For example McDonald's is a good stock and has been steadily rising ever since (over two years) I have been tracking it.
In the stock market, focus on stocks that are moving in tight price patterns. Look for stock charts that show steady trend lines. These will be the stocks that will be profitable for you in the long run. Stocks for profitable companies that move no more than 1 or 2 per day are the perfect for low risk investing strategies.
Making money online is very lucrative right now and very popular. You do have to do your research to make sure you don't get scammed but there are possibilities out there. Consider buying websites that already generate monthly income. In the world of wealth building, cash flow is king. Any investment that can add to your monthly income is an investment you want to look into.
Commodities - gold had a nice run but it is cooling off a little bit right now as the economy recovers. This gives you the opportunity to buy gold at bargain prices before it takes off again.
If you don't have the money to buy gold, consider buying some gold stocks and mining companies as they closely track the price movement and pattern of gold.

Dale Poyser has been investing for over a decade and has done meticulous research on how to build wealth. His primary focus is on strategies that can create low risk residual streams of income.
Not only does Dale personally practice the methods he writes about, he has also coached many others in these methods to show how easy it is to make money with passive residual streams of income. You can read more about Dale's strategies at http://bestresidualincomestrategies.com/

Article Source: http://EzineArticles.com/6798573

Finding Cash for Gold

By Michelle Ann Custodio 

Almost all of us were affected by the recently concluded global financial crisis. Many companies decided to shut down and quite an overwhelming number of people lost their jobs. Now that the worse is already over, almost all of us are looking for smart and effective ways to recuperate. We have to get back on track and there is no better day to do that than today or now.
It is for this reason that people are now braver and more willing to take a risk, all in the name of money. One of the most popular means of livelihood that people are very fond of nowadays is the "cash for gold" scheme. We have always had a high demand for gold in the industry. This is why the value of gold has been surprisingly high these days, despite the recently concluded financial crisis. A lot of people are willing to buy gold from people who have them. This makes cash for gold a very lucrative business for most of us.

If you are looking for easy money or ways to get all of those scrap jewelry off your hands, then cash for gold is the perfect deal for you. Cash for gold is a moneymaking scheme that allows gold holders or owners to sell this versatile element at a very high and reasonable price. When it comes to cash for gold, there is no such thing as unwanted or damaged jewelry. Anything that has gold in it can be accepted.
What you should be wary about in cash for gold scheme are the illegitimate or fraudulent gold dealers or buyers. Ample knowledge and information regarding the industry is your best weapon against these scammers. It is important that you can readily tell if the person who intends to buy your gold is legitimate or not. You should also know how the business works and the value of your gold so that you would not be fooled.
There are many ways by which a gold buyer or dealer can fool us. They can fool us when it comes to the weight of our product or the amount of gold in our product. Such treachery is prevalent especially if we are selling them a jewelry that is not purely made of gold. It is important that you have your product examined and weighed by a local jeweler first before offering it to your gold buyers and sealers. It is through this way that you will be assured of the value that you are getting for your gold on hand.

Article Source: http://EzineArticles.com/6581328

The Best Ways Of Selling Silver Coins

By Shane Hester

Silver is one of the most valued metals on earth. Since ages ago, it made its mark as a beautiful shiny material for jewelry, tableware, and coinage. Today it is used in a variety of fields including electronics and medicine. Like gold and other precious gems and metals, silver is most often sought after for its value. People who own it resort to selling silver as a way to dispose of unused items in exchange for fast and easy money.
It is important to remember these pointers, which you probably will since it is a short list of essentials. Here are some do's and don'ts for selling your silver pieces.
Do Have It Appraised

Just like selling gold or diamonds, make sure to have your silver appraised for you to find out their base price or estimated value. From there, you can determine how much you can possibly get in exchange for what you have. When selling silver, you can have the value of the pieces estimated in a pawnshop or a local jeweler. In addition, watch out for any market price for up to date values. In the past month, it appears the price of silver is around $40 for an ounce.
Don't Settle for Pawnshops
While you can ask a pawnshop to tell you the value of the silver you have, do not sell the pieces to them right away. Pawnshops are known to offer very low estimated values, so unless you are in dire need of cash immediately, do not sell to them. In fact, before selling silver, it is better if you visit a pawnshop or two as well as a few other local jewelry stores. It is best to have the pieces appraised in at least three or four places so you can compare values.
Do Check Online
If you find that your local jewelry stores are a bit iffy, do not feel pressured to make a decision right away. Aside from pawnshops and local stores, do check for reputable online dealers. Some of them are found to offer higher prices and can give you your much needed cash in an instant. All you have to do is to mail them the silver pieces, and later on your check will be mailed to you.
Don't Forget to Investigate
Selling silver can be risky, especially so if you end up selling online. Do not forget to investigate on the dealer; make sure that they are reputable and trustworthy. You can check on the Better Business Bureau if there were any complaints filed against that particular dealer. It is vital that you transact business with a legitimate buyer to avoid any rip offs.
You never know when emergency situations requiring money may occur. For this reason, assets in the form of gold, silver or other precious stones and metals can be a big help in alleviating financial troubles. If you have silver coins or jewelry, you can easily resort to selling silver to get the financial aid you need.

Article Source: http://EzineArticles.com/6589000

The Easiest Stock Investment Strategy - Invest in Dividend Paying Companies

By Rikhi Raj Sachdev 

The best stock investment strategies are the ones that have been proven over a period of time, the longer the better. Few investment strategies have withstood the test of time. Great investors throughout history have used different approaches to investing according to their temperament and goals. The goal of every investor is to make money and compound their way to financial freedom while protecting their capital, whether the investor has a long term or short term view.
The different approaches are Value investing, Growth Investing and Income Investing and or Dividend Reinvesting. Each of these approaches can be used by the long term or short term investor, whether he is a day trader, momentum trader, contrarian investor, turnaround situations, buy and hold investor. These approaches can be used singly or jointly. Remember, every investor wants value from his investment. Everybody wants a bargain. Bargains can be achieved by analyzing the fundamentals of the company or by technical analysis.
Why is investing in dividend paying companies is the strategy to invest in the stock market when compared to other strategies? It is because once you have completed your analysis and you have decided to invest in the company, all you have to do is monitor the fundamental of the company including the payment of dividends.
Analysis of dividend income investing, value investing or growth investing is basically the same. All styles take effort and time to complete. However, keeping of income dividend is the easiest as you do not have to monitor the share price movement on an daily basis. With income investing you only need to monitor the fundamentals and dividends on a monthly, quarterly, semi annually or yearly basis. This gives you time to enjoy life.
All of the strategies study the Balance Sheet, Income Statement, and Cash Flow Statement to calculate the ratios such asset growth, rate of liability reduction, sales growth, earnings per share growth, and return on equity. Once a suitable company is found, then the investor studies the strength of the management. Finally, the investor calculates the intrinsic value. Intrinsic value is the value of a company based on an underlying perception calculated from different ratios of the business. If the market price is lower than the market price, then the investor has found a bargain.
The difference of each strategy is minimal that is seems they are the same. However, it is important to realize that each strategy seeks a different end result. Dividend income investing primarily seeks income first, value second and growth third. Value investing seeks value first, income second and growth third. Growth investing seeks growth first, value second and income from dividend is not important for growth investors. In reality all are seeking value hoping to profit from their investment strategy.
For each investor the value is different. The best strategy is dividend income investing because while waiting to get capital gains from growth you can still earn passive income along the way. Better still you can reinvest divined income to compound your net worth without having to sell the investment. You can hold the investment forever or sell when you think the full value as been achieved. With growth investing to only way to achieve income is to sell the investment. Why would you want to sell an investment that has grown in value? Therefore, income investing is always better. Remember, you must find value in every investment, you cannot pay too much for an investment otherwise you will never get value. As Warren Buffet says "price is what you pay, value is what you get". What can be a better value than getting immediate passive income from dividend income investing?
So, are you looking to be an active stock investor, yet do not want to monitor your investments the whole day. Do you want to invest solely for growth or do you want income which will lead you to financial freedom through compounding your income.
All of these stock investment strategies can be used to achieve success. Do you want to choose the easy or the hard way? I am quite for the easy method will be your choice and that choice is Income Investing. In the long term income investing and reinvesting the dividends will help you achieve financial freedom. Remember to choose the strategy which is suitable to your temperament. Also, remember, the easier system will always be the better choice. Learn and become the master of income investing through dividends paying companies. Remember, the aim of investing is financial freedom.

Article Source: http://EzineArticles.com/6502539

Cash Investing 101

By Scott S Oberholser 

So you have managed your money wisely and have some cash reserves at your disposable. Your desire is to "grow" these reserves by investing. I commend you for both! Yet, you have never invested your money in the past and are not sure where and how to get started. Well, relax and take a deep breath, because it is not that difficult to quickly determine the "where" to start. 401k's and IRA's are perfect investment accounts that provide the beginning investor a simple, low risk opportunity to start investing and take advantage of a great cash management technique. And one of the places you can start immediately,may be available to you at the place you go everyday, your workplace.
A 401k is a company/employer sponsored retirement plan that will allow you to deduct a portion of your paycheck each month and put it towards your retirement. This money earns interest and is tax free. That is one of the ways that a 401k allows you to grow your money. Here is the other: many companies will match or contribute a portion of the amount you put in your 401k. This is free money that you will also be earning interest on. How are you able to earn interest on this money? Companies like the one you work for, that participate in 401k programs outsource the maintenance of your account to mutual fund companies, financial services corporations, and banks. These companies will in turn invest your money in stocks, bonds, and other money market instruments.
Once established, a 401k is yours to keep until you retire at age 65. If you leave the company where you set up the 401k, you have a couple of options. One, you can withdraw the money and close the account which would involve early withdrawal and tax penalties. Or two, you could transfer, or "rollover", the account to an IRA.
An IRA is an individual retirement account that you can set up separate from the company you work for. It can be started on it's own, separate or concurrent with a company sponsored 401k. There are two types of IRA's you can invest in-Traditional or Roth. What is the difference? A traditional IRA allows you to contribute pre-tax income. This means any money you contribute will not count as income on your tax return. You will have to pay taxes on the money you withdraw once retirement rolls around. A Roth IRA works in a directly opposite manner. Money you contribute to this plan will count as income on your tax return but can be withdrawn and received tax-free when you retire. To set up an IRA you simply need to contact a financial adviser in the field of investments. He or she can help you set up either a Traditional IRA or Roth IRA and further explain which plan would be right for you.
Congratulations! If you start a 401k or IRA you have employed one of the best cash management techniques available to you. Pat your self on the back for not only saving enough money to invest but for also taking free cash advice.

Article Source: http://EzineArticles.com/6507313

Dividend Investing - Pros and Cons of Dividend Investing

By Howard Feigenbaum 

Investing for dividends is an excellent way to participate in the stock market. Dividends represent the sharing of a company's profits with those who hold stock.
There are two kinds of stock: common and preferred. Common stock pays no or low dividends; preferred stock customarily pays a dividend on a regular basis. The investment return on common stock is from a hoped-for increase in the company's share price over time. The investment return on preferred stock is a combination of current payment of dividends as well possible long-term increase in share price.
An investor may purchase individually owned shares of companies which pay dividends. Or, an investor may purchase shares of a mutual fund which has the objective of owning dividend-paying stocks. The latter is generally considered a more conservative approach since your investment risk is spread out among the larger number of companies in the portfolio.
Pros of Dividend Investing:
1. Dividends create a source of cash for re-investment. There is a continuing stream of cash created by dividends. Re-investment of the cash in the purchase of additional shares is a great way to grow your portfolio.
2. Dividends create a source of cash for monthly income needs. At some point in your life, you will need income from something other than work. Having a flow of dividend income is a wonderful way of planning for your economic freedom.
3 Dividend investing benefits from dollar-cost-averaging. Constant re-investment of dividends over time creates an average cost basis. The theory is, that through continuous purchasing of shares, the average cost will be lower than the current price.
4. Dividends offer a source of earnings in a down market. Investor frustration and fears rise during a market decline. Dividend investors can take solace from the fact that there will be profits from their portfolio during the downturns.
5. Dividends pay you profit now. For many people, receiving money right now as profit on their investment is more comforting than waiting for the share price to rise. "A bird in the hand is worth two in the bush," is an adage you can apply to dividend investing.
Cons of Dividend Investing:
1. Dividend income is subject to ordinary income tax. Every year investors must pay income tax on dividends.
2. Dividends are not a guaranteed payment. Dividend payments are subject to change. If the business of a company is not as profitable as it once was, the company may choose to lower or suspend dividend payments. The risk that any one company may have poor results may be lessened by diversification.
3. Dividend investors may not make as much profit on share price increases as common stock investors. Since dividends are a recognition and payment of profits, dividends are part of the company share value. With a common stock, most--if not all--of the share value comes from a rise in market price. Some investors believe that there is a greater potential return from common stocks. However, there may also be a greater market risk.
4. Dividend-paying stock prices may go down when yields rise in the market place. Companies that pay dividends compete with other investment choices. The dividend yield can be an attraction. However, when yields generally rise and investors can get higher yields elsewhere, the yield of a lower-than-market dividend may be offset by a lowering of share price to make up the difference.
As with any investment, you would do well to remain vigilant in assessing factors which affect the value of your portfolio. Take an interest in how your investments work. You will be more at ease in knowing what to expect.

Howard Feigenbaum is Registered Principal and Owner of Sharemaster, a Broker-Dealer firm that specializes in monthly dividend income funds.
"Do you know the only thing that gives me pleasure? It's to see my dividends coming in." - John D. Rockefeller

Article Source: http://EzineArticles.com/6493759

Article Marketing And SEO Tips For Your Online Business

By Dascalul Radu 

Article marketing and SEO are two great strategies which can be successfully used in any type of online business to drive organic traffic and generate laser targeted leads. In fact, if they are implemented together consistently your business for a couple of months your results will increase dramatically.
Today, I want to share with you more things about how article marketing and SEO work plus some practical steps to integrate them in your marketing efforts.
SEO is represented by all the adjustments you can make for a blog, website or a simple piece of content in order to be found and indexed by the major search engines: Google, Yahoo, MSN, Bing etc.
There are two main types of optimization:
-On page: all that can be done on a page to appear in the search results
-Off page: is nothing else that getting strong backlinks for your page and increase their rankings.
Article marketing is one of the best off page strategies! It involves writing optimized articles and submitting them to various article directories social media sites and so forth. The goal is to get as many backlinks to your blog from the authoritative websites. Thus, Google and other search engines will give you more recognition and of course traffic.
However, there are people who write an article only for the search engines and ignore a vital element: people. Every piece of content you put on the Internet must be original and valuable! Stuffing an article only with SEO stuff will create a bad reputation among your readers!
Here are a few tips to combine article marketing and SEO harmoniously:
-Keyword research
Before you write anything, research for low competition keywords. These are actually solutions to the problems from your niche. Use professional tools to make a complete analysis and select long tailed keywords ( usually these have a good amount of global monthly searches and can bring you decent traffic).
-Focus on your blog
This is the central hub where you brand yourself, create a community and promote different products or services. Article marketing and SEO must be used to make your blog stronger! So, write a blog post first using the chosen keyword.
-After your blog post is published, write an original article which provides great information. Keep it short (around 500 words) and always related to your niche.
-Use the same keyword wisely
Instead of stuffing the article with keywords, try to maintain a good density (use it in the title, the first sentence, around three or four times in the body)
-Include in your resource box two links to your blog (one in the original post)
Try to avoid spamming here! The article offers certain solutions and the resource box must lead to additional information.
After your article is completed submit it to multiple article directories (Ezine Articles, Go Articles, Articles base and many more others), social networks, social bookmarking sites etc.
As a recommendation, don't use article submission software. Google doesn't appreciate that and as a result, you will not rank for them.
With these guidelines, article marketing and SEO can work wonders for you now and in the long run as well.

Article Source: http://EzineArticles.com/6473008

4 Essential Steps To Complete If You Want To Make Money With Adsense

by: Jeff Schuman

Do you want to make money with Adsense but are not sure how to do that effectively? Then you need to understand the essential steps that need to be completed before you will be able to make any money with Adsense.

The following are the most important steps that need to be completed before any money can be made with this method.

1. Requirements - In order to get an Adsense account with Google you will first need to have a URL for your web site where you will be placing the ads so that it can be checked by a Google ad reviewer.

You want to make sure your site has good content using articles or reviews and isn't just one big advertisement. Making money with Adsense is easier to do when you have other content on the site to keep visitors there.

2. Google account - The next step is to sign up for an account with Google which is free and easy to do and then sign up for the Adsense service. Always be sure that you take time to read the policies and regulations for Adsense so you don't break any rules while making money this way.

Once you have submitted your information for an Adsense account you need to give it time because a reviewer will want to look at the URL the ads will be placed on before you can start placing ads on your site. You will get an email when you can begin making money with the Adsense ads.

3. Use the right ads - Once you have been given permission to start placing ads you want to be sure you choose the right ones to add to your website. There are many different options but when choosing the ones you want to use be sure you choose one that will blend well with your website so it doesn't look out of place.

4. Market your site - You have to market your site using as many marketing methods as you can. The more you market the more traffic you will have to your site and the more chance there is that people will click on the Google Adsense ads to help you make money.

These essential steps all need to be completed before you will be able to make money with Adsense. The sooner you get started on doing these steps the sooner you can start making money with Adsense so don't delay get started immediately and before you know it you will have passive income coming in every month easily.

The Revolution in Online Trading and Investing

By Ronny Harrison

It's no coincidence that between 2008 and 2010, individual investors pulled more than $400 billion out of full-service brokerage accounts and put that money to work in discount brokerage accounts instead. This new trend toward self-directed, online investing is a very different phenomenon from the day-trading mania of the late 1990s. That was a fad driven by the frenzy for tech stocks, and it ended in disaster. The tech stock speculators of that era still haven't recovered their money. But the self-directed investors of today are a different story. They've made a rational decision to take charge of their own investments instead of paying a small fortune to have someone else do it for them-someone whose financial interests may not be the same as those of their clients.
The trend toward online trading and investing has been helped along, of course, by the availability of things like mobile investment apps and user-friendly stock tracking software. The driving force, however, is not consumers' love of new technology but rather a desire to take control of their own finances. Indeed, the pull of do-it-yourself, self-directed online trading and investing is so strong that Merrill Lynch, the biggest name in full-service brokerage, recently threw up its hands and opened up a discount operation of its own.
If people are having second thoughts about full-service Wall Street brokerages, they aren't feeling much better about mutual funds, with the heavy management and marketing fees many of them impose. Mutual fund companies are ingenious when it comes to choosing statistics that show their results in a positive light. What they can't disguise, however, is the fact that most of them underperform the market as a whole. They don't perform the same as the overall market; they perform worse, largely because of those onerous fees that most of them charge.
Some people argue for investing in low-fee, passive index mutual funds, which guarantee results that are only slightly worse than the market as a whole. Passive index funds might a better choice than actively managed funds that charge high fees for mediocre performance. Even so, in today's fast-paced business environment, where companies and even industries can become outdated almost overnight, passive investing is hardly an ideal solution to the needs of ordinary investors.
Are there better solutions at hand? Indeed there are. By investing a little time and effort and harnessing the generous array of tools and data now available to everyone online-at little or no cost-investors can learn to do for themselves what many high-priced stock brokers do not do on the customers' behalf. They can develop a systematic methodology for identifying the stock market's myriad opportunities, and they can pursue those opportunities with a disciplined eye toward securing their own financial futures.

Article Source: http://EzineArticles.com/6425373

The Two All-Important Secrets of Online Trading and Investing

By Ronny Harrison

Thousands of individual investors have pulled their money out of full-service brokerage accounts and are now trading and managing their stock market investments online. They'd do well to bear in mind the two great secrets of success in stock market investing: cutting losses early and riding with your winners for as long as possible-up to the point where they turn risky.
Secret One: Cutting losses early
In a classic essay on investing, "The Loser's Game," author Charles D. Ellis compared investing to playing tennis. Tennis pros, Ellis observed, possess qualities that most amateurs don't-like superior speed, strength, athleticism and shot-making skill. The average amateur does not win a match the way that pros do-by making breathtaking shots. Instead, they tend to win by simply not losing. They keep the ball in play long enough to let their opponent make the first mistake. In other words, amateur tennis games aren't really won by anybody so much as they are lost by the weaker player. Average players tend to be their own worst enemies, defeating themselves by attempting difficult shots when they'd be better off playing for the safe, sure thing.
Investing in stocks has a great many similarities. Too many investors become their own worst enemies by ignoring what should be obvious. They fall in love with a stock they own and then fail to recognize when it's time to sell. They fall in love with a stock because it's an iconic name like Apple or Berkshire Hathaway, or they become infatuated because of all the time, effort and ego they invested in picking the stock in the first place.
Secret Two: Riding Winners Longer
The other trick to maximizing profits is to stick with a well-performing stock for as long as possible-up to the point where owning it becomes risky. True, you won't lose money taking profits prematurely, but neither will you make much money. Legendary trader William Eckhardt puts it this way: "Amateurs go broke by taking large losses; professionals go broke by taking small profits."
Even the pros have a tendency to sell their winners too early. As Eckhardt explains, that's because it's actually against human nature to operate in a way that maximizes gains. This is a vitally important point. Instinct tells us to act in ways that maximize our chances for gain, but that's different from maximizing the gains in total. We instinctively want to maximize our number of winning trades (and to minimize our number of losing trades). What we really ought to focus on, however, is something else-the overall extent of gains and losses, which are what really matter.
How do you avoid falling in love with a stock and holding onto it long after you should have sold it? And how do you know when a winning stock you own is running out of steam? It's less difficult than you might think. Future articles in this series will elaborate upon the ABCs of developing and pursuing an objective investment methodology, using the expanding array of online stock market tools and data that now available to everyone at little or no cost.

Article Source: http://EzineArticles.com/6425379