Candlestick Trading Blog
|In today's article we discuss basic stock advice that you will come across as a beginner investor. Information such as why you should invest in stocks, the disadvantages of stocks, as well as the different stock market trading strategies practiced by investors will be discussed.
Trading and investing in stock is a great way to make money whether you are doing it full-time or as a means for extra income. There are many reasons why many people choose to invest in stocks. We will discuss three important reasons. First of all, the returns overtime outperform other asset classes such as bonds or real estate. Stocks can generally produce a return of about 10% per year whereas other types of investment will give a lower return of about 5%. Another benefit of investing in stocks is the taxes. This really applies more to long term investing for those that hold stock for more than one year. The long-term capital gains rate is 15% compared to the standard tax rate. Investors will also receive stock advice telling them to be sure they diversify their investment portfolio. Stocks can provide portfolio diversification because if you invest across a wide variety of stocks, if one bottom's out, it is not a major issue.
Of course investors must be aware of the risks associated with stock investing because the stocks market can vary widely. Again, however if you are properly diversified you shouldn't lose out big if one of your stocks plummets. Of course, with higher potential for gains there is always higher investment risk.
There are also a variety of different investment strategies when dealing with stocks. You will receive an abundance of stock advice no matter which investing strategy you decide to practice. Many investors opt to practice value investing. These investors look for those stocks that are currently undervalued by the market. They then look for those undervalued stocks that they believe will earn more than experts predict. Another type of trading is growth investing. Investors look for stocks they think have a high potential for growth but are not necessarily undervalued. These growth stocks are believed to grow faster than the market expects.
The last stock investing strategy we will discuss is perhaps the most exciting. Short term trading also known as day trading, is based on technical analysis which uses stock charts and other technical indicators to predict a stocks movement based on price change. Japanese Candlesticks stock charts are considered to be the best type of stock chart to use and many are successful using candlestick analysis. Continue to learn about Japanese Candlesticks to see how you can make a profit in the stock market.
Online Stock Market Reviews presented live via the internet by Stephen Bigalow