Stock Investment Rules
I started my first investment since September 2009. The first stock I bought is Gpacket 0082. I made roughly 70% of profit from it in 3 months time. Undeniable, it is just lucky. I knew nothing about fundamental or technical. What I saw was just future of Wimax and read some news about it. Now, I refresh back, it was full of risks! I might loss all if the luck was not on my side. Therefore, I have set a few rules for myself in stock investment.
Protect Capital – This is most important among all. Never take any risk on your hard earn money. Cut loss if necessary.
Only Invest In Earning Company – I only invest in company that can make profit consistently.
Invest Personally – I seldom join the discussions with friends regarding the stock market because they are just average. I don’t want to be influenced by them.
Different Direction – I only invest in stocks that have low PER. I also not following people buying hot stocks.
Invest Not More Than 5 companies – I have restrict myself from investing more than 5 companies so that I can decide faster and more precisely during the recessions.
High Return On Equity – I look for stocks that have ROE more than 15% or better 20%. ROE less than 10% will be out of my consideration for long term investment.
This is my stock investment rules after six months of investing in stock market. I choose stock based on this 6 rules.
I must agree that your six rules of stock investment are good guide in your stock investing. If you follow them closely, that would help you to make good return. However, the challenge is still in the monitoring part. Make sure you spend enough time to monitor your stock portfolio.
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Mrcoolku Reply:
April 20th, 2010 at 8:02 pm
Thanks for your advise. I stick to my rules closely. I read and review my rules often to keep myself remember it.
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Your rule #3 requires positive attitude and the spirit of continual learning. I am doing the same. Please do share your experience in your future post to encourage others to do their own investment rather than listening to hot tips or follow the crowds. Keep it up.
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Mrcoolku Reply:
April 24th, 2010 at 10:07 pm
Listening to hot tips is okay but you need to digest and interpret it yourself. Not every stocks is buy-able. Don’t follow blindly. I learn how people analyze the stocks from forum. It really is a continual learning process.
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