Give some good advice to small investor?

small investor always belive that income through stock exchange seems to be good investment.But reality seems to be completly different.Mainly small investor losses there money in large numbers.Why such things happens?Is there any safe gaurd reagarding this accpect?Is there any rules prevails for gaurding small investors ?

because many small investors invest like how fund managers do. meaning, they trade too frequently, trade unecessary stocks, and too much hooked with the market sentiment.

Why small investors should invest different way?

unlike individual investors, fund managers have overhead cost to pay and their performance to compare with. losing their fund performance to another fund managers is the last they want it to happen. reason? they afraid customer will cash in too early and left them with no choice but less business income.

Why people lose money in the stock market?

1) They don't diversify
Advise: Buy index funds or ETFs rather than individual stocks for inexpensive diversification.

2) They panic and sell too quickly
Advise: Only sell when you need the money

3) They think that the stock market can be predicted by reading magazines, or getting tips from friends or brokers.
Advise: Don't listen to anyone's advise on picking individual stocks, or on the state of the market. Everything is priced according to all available information, nothing is too cheap, or too expensive because the market adjusts to new information very quickly.

first read the following books. knowledge is power in this case. the more you are willing to learn the better your chances ok.

1) the intelligent investor
2) security analysis
3) basic financial accounting text book

these will help you find fundamental sound companies to invest in.

Rule #1: Don't lose money. Rule #2: Don't break rule #1. (Warren Buffet) Rule #3: Take control of your finances, ie: don't let someone else do it for you. Rule #4: Pick good companies that offer options. Rule #5: Pick companies in a strong industry, ie: Technology, Mining, Energy, ext. Rule #6: Diversify, Technology, Mining, Energy, ext. Rule #7: Do your research. Rule #8: Don't invest more than you are willing to lose. Rule #9: Don't invest more than 10% of your funds in any one sector, ie: Technology, Mining, Energy, ext. Rule #10: ALWAYS use a stop lose! These are my investing strategies but others may very depending on risk comfort, portfolio size and any number of other things.

You need as much free information as possible. An easy, risk-free, way to start learning about the market, is to create a "practice" portfolio at http://www.top10traders.com - it's free - each month the site ranks the best performing investors.

check this link its good


http://buyingandsellingshares.blogspot.c...

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read market wizard. I got that book as a recommendation from a hedge fund manager in merril lynch. Get to know the big guys and how they do it big. don't listen to newbies and so called professional unless they are making millions already.