Many friends of mine asked about multiplying their money by doing unit trust trading. I said, unit trust actually not meant for trading, it’s for medium to long term investing. If you want to trade, you better go for stock market.
Stock market has long been known as one of the lubuk emas to make money. Our late beloved Tok Pa is one of the stock market hardcore. I still remember when I tumpang him to go to work in KLCC, he can talk anything about business all the way. Yes, ALL THE WAY!
Mula-mula tu blur la jugak. Yelah, I’m not from Finance nor Acocunting background and my only Financial subject during Uni was Intro to Finance which was very the basic. But as time goes by, somehow, I picked up some important point when it comes to making money from stock market. So, let me share what I’d learn (I learned it from my FIL okeh, FOC je :P).
3 Ways to Make Money in Stock Market
Trade on Trend
I bet you must have seen a lot of stock market graph right? Ala yang dalam Business part in the newspaper tu. Do you know what makes the stock prices keep on changing every minute? Some might said supply and demand but to me, it is just a reflection of human psychology.
For example, if the market is pessimistic about a particular stock, its share price will tumble as most shareholders are selling their shares & vice versa. Like when you want to shop in Pengkalan Kubor or Rantau Panjang (Kelantan ajer..), if you go during school holiday for sure kene katok punya, but if you go during sunyi-sunyi hours, you’ll get la at least 50% discount.
So what is trade on trend then?
Trading on trend is basically you identify some gap for trading opportunities. Let say a stock price is hovering around $2 to $3, you can profits $100 (without considering broker cost yet) if you buy at $2 and sell at $3. However, you can lose the same amount of money if you buy $3 and sell at $2.
Therefore, in trade on trend strategy, the key to success is basically understanding the market behavior take advantages of their over-pessimistic and over-optimistic.
Failing to spend enough time with the market (reading business paper, watching Bloomberg, listening to business channel) means disaster to you. Some called this as Swing Trading strategy…
Follow the Momentum
Remember when oil price shoot up to USD100 last year? That time, any oil-related companies shoot up in price as people assume the oil price will break USD200 mark. If you buy any oil-related companies that time, almost 100% certainty that you’ll make profits!
And that is momentum investing is all about. The idea is you ride on current trend and exit before the stock lose its stim. Just look at how Apple share price increase when they first unveiled the first iPhone…
Buy on Weakness
This might be the same like the first method but actually a little bit different. In this method, you are actually invest in a particular stock for long term. Warren Buffet make it as long as possible!
How to do it? Oh it’s very easy. You just buy quality stock at discounted price and just wait when its price shot up again later. When I said later, it can be either months, years or even decades! Depending on which stock you are investing, I don’t think you have to wait a century to reap the profits!
Over the past 50 years or so, Warren Buffet’s return is about 23% per year. Just imagine if you invest in what he invest, you money will be $31Mil if you start with $1000 50 years ago!
I wish I can retire with that kind of cash…. Mak kayo!!!
It’s not that difficult to understand the concept of stock market trading, provided you willing to learn because it is not as easy as buy and sell. OK, many people think that playing stock is simply buying low and selling high. How do you know its price will go up higher? How if the company goes bankrupt? Investing is not gambling OK.
Start buying stock if you don’t know what you are doing is suicide. But if you wish to learn more about stock market, try playing stock market game like this one. You can trade stock without paying any cents! Click here to start play & learn stock market now…
Because I want you to learn stock market, whoever signup the above stock game and start trading, I’ll give you "A Practical Guide to Swing Trading" for FREE!!! Just drop your comments here with your registered username and I’ll send the eBook after I’d check your username. Easy kan? Don’t wait, learn stock now…
So, where do you plan to invest your money in 2009?
*p/s : Do you already invest in stock? Mind to share?
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