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Investing in stock market - stock market recommendations

Investing in stock market 


Almost every investor met with the concept of a recommendation. Stock market recommendations can be called recommendations, advice. In any case, their aim is to help them make investment decisions.

Since there are a lot of recommendations in the press and on the Internet, I would like to introduce some of the principles that are important to me, how to read stock market recommendations so that they bring the greatest possible benefits.

Before making an investment decision, it is worth:


Check the date of issuing a  stock market recommendation, the period of time for which it was issued (short-term, medium term, long-term).

Check the quotations of a given company in the period between issuing a  stock market recommendation and the current one. Often, after a few days, the data may be outdated, as profits were realized immediately after the recommendation was issued and before its declassification. In such a case, the investment may be delayed, especially if the recommendation was short-term.

Look for other stock market recommendations about the same company and compare them.

See who is the author of the stock market recommendation and whether it has any links with a given company. If it is the so-called "offeror" (originator), it will be rather obvious to applaud a company. Check also what effects the previous recommendations of the institution have had. Perhaps its valuation methods are very good and high recommendations are verifiable, which is a good thing for the future.

Furthermore:

Do not try to follow the current recommendation. If most analysts recommend selling stock, do not buy them. Counting on their mistake, you can incur considerable losses and stay with stocks that no one will buy.

Do not make any decisions solely on the basis of read stock market recommendations. Try to understand their basis. Consider what might affect the stock price, especially in the long term. Pay attention to seasonal factors, new contracts, exchange rate, situation on the world oil and other raw materials market. Such observations, especially in the case of medium- and long-term recommendations, may be very valuable and may confirm your decision or give reason to consider and possibly give up or reduce the value of planned investments.

Remember, even the best stock market recommendations require monitoring of their decisions. Once you have purchased the stocks, determine the level of profit you are satisfied with and sell the majority or all of your stocks without waiting for them to grow.

This is one of the most important principles to be borne in mind. Realise your profits before others do the same. If several large investors make the same decision at the same time, the price of the stock may be overvalued, and the "forever waiting"loses out. The same applies to the stock price decline and the maximum loss you can accept.

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