
Basic market trading stock options for a beginner should not be considered a genius. Yes, you need the information and develop skills that will guide you into the commercial arena. These can be acquired through study and hands on trade with an account that trade with the “play” money, which all retailers along.
Go to seminars to learn the trade. They happen all the time for runners who want to subscribe to their services. They give examples very general and simple interest. Precisely because they are becoming a minority investor. retail investors is a scary noise in the hallway. In short, this means you will not get their rates to complete their operations.
George Soros once said: “It’s not whether you are right or wrong is important, but how much money you make when you’re right and how much you lose when you’re wrong.” So in this article, I will share with you three golden rules on risk management for investors.
Golden Rule No 1 – Invest in your spare cash
The first rule in investing is to invest with money you do not have to be used for several years to come. I realize that a major reason investors lose money when they are forced to sell their investments at a price that undervalued because they needed money for their personal expenses. However, when you invest your extra money, you do not fear or need to sell in bad times.
Golden Rule No 2 – management of liquidity risk
During the period when the stock market is crashing, you do not want to end up holding the stock, instead want to make sure that you have “balls” enough to “shoot” when the market is weak. The worst that could happen is that when the stock market crash, you do not have money to buy. Warren Buffett once said: “Cash combined with courage in a crisis is priceless.” So never put all your money in investments. Instead, always make sure you have at least 20% of your net worth or 6 months of monthly expenses in cash or cash equivalents. Although cash is lousiest investment during the market correction, Cash is King!