Don’t lose money in shares investment

The first rule of the investment is ‘Don’t lose money!’.

It sounds easy but when it comes to investing in shares, how do you ensure you do not lose money?

Infact, you will find out during the first few days/week of your investment purchase. If the share price go up, congratulation. If it moves sideway or down, it means capital tied down and this can mean your money is tied down for few weeks or months. Some investors may sell their shares to cut loss hence it means physically money loss. Many investors rather hold on to their not performing shares and it means paper loss and it will cause opportunity cost. They cannot use that money to buy other rising stocks.

The first step of investment is very crucial as it will determine whether you make profit or suffer losses. Does it right the first time and the rest will be safe if there is no major crisis happening in the macro economic environment.

From years of experience in shares investing, i have found it is possible to protect the initial capital but needs lots of discipline to ensure the money is safe.

Follow the few steps and hopefully it may help you safe guard your investment and make lots of profit.

Always invest in amazing industry that mean something to you. That mean business that you know and will still be around in the longest time. Some good industries are food, drinks, Oil, Banks, Financial, Airlines…etc. Do research and study their potential in the next 5 to 10 years. Some industries are around since many many years and will still continue….get it?

When buying shares, it is not just buying a share! It is investing in a business or company that you want to see it grows and make profit for the longest period of time. Always have a investment time frame of holding it for 5 to 10 years.

During the trading, don’t buy when the price is going up. This is a scenario when many shares have traded, lot of people are snatching and chasing the share price skyrocket up. Reason being you do not know the reason behind the rising share price. It could be other big instititutions are off loading the shares and investors just buy blinding. It can be ‘rumours’ that is spreading that the company is in some form of ventures or profit gained.

Always do your research before buying, there will always be enough time to buy not soon but maybe later.

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