Pinoy New Era Of Investment

• Diversify, spreading some of your money across a wide range of you Local stocks, some in foreign stocks, and some in bonds.


• Be sure you can afford to lose 100% of your money if you are wrong about this stock.


• Appraise you own ability to understand the business the company is in.


• Ask who this company's main competitors are and whether they are becoming weaker or stronger.


• Think about whether this company's customers would take their business elsewhere if it raise the price of its goods or services.


• Look back at the company's annual report from its most profitable year and read the chairman's letter to shareholders. Did the CEO brag about the company's brilliant decisions and its infinite potential for growth, or did he warn not to count on such ideal conditions in the future?


• Imagine that the stock market closed down for five years. If you had no way of selling this stock to someone else, would you still be willing to own it?


• Remember that this stock must go up more than 3 percent just for you to break-even after paying all your brokerage costs and capital gains taxes. On short term trades, you need a 4 percent gain before cost to break even after your trading cost and taxes.


• Write down three reasons - having nothing to do with the stock price - why you want to be the owner of this business.


• Remember that you cannot buy a stock unless someone else is willing to sell it. What, exactly do you know that this other person may have overlooked?

Don't

• Buy a stock just because its price has been going up.


• Rationalize your investment with any reason that begins with the words " Everybody knows that......." or " It's obvious that....."


• Invest on a "tip" from a friend, a recommendation on TV, "technical analysis," or rumors about mergers or takeovers.


• Put more than 10 percent of your money in one company ( including the company you work for.