3 Simple Stock Tips

So, you want to invest in the stock market. Doing so half-heartedly and without the proper due diligence can destroy you. I've been in the stock market for many years and I've made huge trades and trades that were huge mistakes.

How can you avoid getting slaughtered in the stock market? I've come up with three simple stock picking tips that will help point you in the right direction.

Stock Tip One: No Easy Way

Sorry, there's no easy way to pick winners. Buy into all those "systems" if you want, but in the end you'll be left high and dry. Picking winning stocks is a process—an on-going process.

Stock Tip Two: Don't hold a stock for decades

There's an ancient thought out there that says you should buy a stock and hold it for 10-20 years to make money. I don't know about you, but this doesn't sound like a good time.

If you were to look at everyone who makes a lot or has made a lot in the stock market, you'll find that they trade either very often or somewhat often. Rarely will they have a stock in that sits in their portfolio for years. They may own it off and on in that span, but that's the key.

Stock Tip Three: Do your homework

Don't just buy a stock because a friend of a friend said it's going up or because some service is touting it. Learn how to analyze stocks and companies for yourself.

Ask yourself, why is this stock going up? If you can't answer it, specifically, it's not a good move.

Are You Stock Trading Ready?

Stock trading is not for everyone. In order to be a good stock trader you must first understand market fundamentals and then build upon that knowledge to make good stock picks.

You must know how the markets move. You must know the various indexes and how they perform. You must know how different types of stock classes i.e. blue chips, small caps, equities, etc respond to real world events.

You must understand how interest rates impact the various stock classes.

You must be able to recognize buy and sell signs. And this list is just for starters.

In other words, stock trading is not for the naive and inexperienced. Before you go and plunk down money in the stock market you must know your stock trading ABC's or have your lunch ate.

There are several ways to gain the education you need to become a good stock trader. You can take a stock trading course at your local community college or courses given by local business groups. You can load up on stock trading books at Amazon.com or from your local library and study them religiously. You can attend stock investment seminars given in your local area. And of course you can search the Internet where there is tons of valuable information on the subject of stock trading.

But your best bet when it comes to stock trading maybe to turn it all over to a professional. Good stock brokers are worth their weight in gold. With a good stock broker you can avoid the stock trading learning curve which is fraught with pitfalls. Indeed, hiring a broker might be the best course of action because stock trading is a serious business that takes no prisoners.