Investment Advice: Don't Take Investment Advice without First Doing Your Own Research!
Hello again fellow 22Readers! We are happy to be back in the States after a much needed break. We spent the past week on a cruise around the Bahamas and had a great time.
Today we wanted to talk to you about one of the best investment tips ever given to us. A wise man, who wishes to remain anonymous, once said never listen to anyoneâ€™s investment â€œhot stock tip.â€ Many times on 22Dollars we present information and discuss, from a technical and fundamental standpoint, what it is that we see in a stock and why we think the timing might now be correct to profit with little risk. I stress that we are simply â€œpresenting the dataâ€ as we see it for YOU to investigate more and make the decision.
Too many times beginners, new to the market, simply take a stock their buddy said was â€œhot to profitâ€ or a stock mentioned on some blog and buy in blindly. I have personally been a victim of this in my early days of trading. Do you remember a stock called Global Crossing? "They had the largest fiber optic network and huge profits" exclaimed my buddy. Without any further research, I purchased the stock. Down 10%. Down 50%... still holdingâ€¦ Down 100% (Bankrupt). This was of course a long time ago but still a lesson that many people should pay more attention to.
This is especially the case with the increasing power of the Internet and blogs. Any Joe-schmo can start a blog and throw investing advice around with no credentials. This is also true with message boards such as those on Yahoo Finance. Some individuals will even go on the board, hype a penny stock, wait for a move and sell out. These individuals are called â€œpumpersâ€ and it is against the law to do so.
Without getting further off topic, the main point is that everyone has come across that relative, best friend, classmate or co-worker who has recommended a stock. While this is not saying they donâ€™t have a good stock, you should still do your own research. Determine if the stock is the one that moves parallel to your risk tolerance.
Remember that in the end, no one cares more about your money than you do.