Tips for buying stocks

As I have invested my money around the world, I met people from diverse cultural backgrounds and education, most of these people were losing money in the stock market, with the exception of a few who had almost the same way of thinking, even if have lived in different continents and never met before.

I realized that making money from stocks is not a skill, but rather a way of thinking or mentality. Any person of average intelligence and background of moderate to invest can make good profits from the stock market simply have this mentality.

This article aims to give advice for the purchase of stocks so that you end up with the mentality of those who make a lot of money from stocks.

Tips for making money from stocks

* Buy what you know: Never buy a stock because you heard that its price will rise, parents, friends and even brokers are good people but most of them will give you incorrect advice which results in wasting your money.

* Do not worship cards: Technical analysis is only useful to determine the time to buy something you already intend to buy, depending on technical analysis alone and you are ruined.

* Avoid frequent trading: I met a lot of day traders, but I've never met someone that capital gains realized during the period of five years. I have seen some do 50 on gains in a few months and few years later he went broke. Day trading is gambling, frequent trading is like a coin flip, so be sure to avoid both.

* Buy and hold: When you find a good opportunity to hold on to it, most people who trade to sell their stocks when they earn 5% or more, if they waited for a few months could have been sold with 40% and 50% of the profits. When you buy a good stock to allow him to raise the price of holding on to it, at least for a few months. With the first sale of the stock price reaches its potential will be wasting your time and minimizing your profits.

* Avoid diversification: Warren Buffet, the richest man in the world that has made his money from investments once said that diversification is good only for those who do not know what they are doing, if you are sure that you know five good actions then have confidence in themselves and distribute the money among themselves instead of buying random thirty companies that you know nothing. Diversification can reduce returns scientifically especially when you believe that stocks will rise in price from a few good percentage .......