Throughout your investment journey, have you ever gotten tips on which stocks to look out for? Personally, I have experienced this many times and have received tips from both professionals and amateur investors. I for one, am not a fan of investing based on hearsay and only invest based on my own stock investment guidelines that I have set.
Recently after watching a TVB drama that has a storyline related to stocks, there was a scene related to stock tips from a stockbroker. When the stock pummeled, he was blamed for giving the wrong tips. This has brought me flashbacks of an experience when I was young where my dad will be fetching me after school to his friend’s office to view a TV with a black screen & numbers. I remembered him relying heavily on tips from his friend & was using a margin account to invest. The investment did not go well & he ended up losing his money. Because of that experience, my impression of stocks investment has always been bad until I personally learned about it in detail via the internet & books.
My other experience was when my college friend & I were out for a catch-up session. When we talked about stocks, he was happy to share this particular stock with me but when I asked him where he got this information, he mentioned that he got it from his friend. If you got tips like this, have you ever questioned the reliability of the source? Some will also ask me to buy these stocks few days before their scheduled press conference. During the press conference, the good news that was shared actually helped to increase the company stock price. On a few occasions, their tips were actually accurate as stock prices did actually went up. Did I buy it? My answer is NO.
My concept on stocks investment is very simple. There are a few checklists that I have been using that guide me over the years. Since all of my investments are long term investments, I don’t usually sell my stocks investment whether it is during good or bad times as I rely heavily on the company P&L rather than those short term news. Don’t get me wrong. Those reliable tips can be helpful sometimes if you are a trader where you invest only in short term investments where you are buying at low & selling high but there are also risks involved in it. Ask yourself, are you willing to take such a risk?
Some people will use their margin account to execute such trade & sometimes it will also lead to them losing their money. Even when you are referring to the tips that are published on reliable sites by those stocks analysis, how accurate is their predictions or tips? If it is accurate, most Malaysians would have experienced a windfall from those tips & we won’t be working hard anymore for the rest of our lives. I may sound sarcastic but it is proven that the predictions by some stock analysts may not be accurate but you may also find 1-2 hidden gems in their tips.
The tips given by them can be used as a guideline for you to study whether those stocks are worth to invest or not. How? If you are new to stocks investment, it is good for you to learn about it via books or reliable websites. If you are an experienced investor, you should have your own stocks investment checklist where you can use to detect whether the stock is a good investment or not. If you have no checklist, you should prepare it to guide you with your stocks investment. You should do your own studies rather than to fully rely on any tips. Ask yourself, are you willing to trust others with your money? Stocks investment can be risky if you have a low understanding of it but if you have a proper understanding & checklist, you are able to minimise your investment risk.
OSS!
You can also check out my latest YouTube video on How To Spot An Investment Scam In Malaysia:
