Stock market investing Philosophy

The Goal is to Build Wealth

This site aims to help you build wealth by providing information you can use to guide your investments in the stock market. Inflation and the upward bias of the world and United States economies supports a long term upward trend in stock prices. Yet around this upward trend occillate up and down cycles. Prudent timing of your buy and sell decisions can help maximize your profits and minimize your losses. An aware investor using fundamental and technical analysis can make these timing decisions. We want to help you develop that awareness, and we hope you visit and contribute to this site often.

Risk and Selling

You take a chance when you buy stock in a public company. After you buy the shares the price may go down. If you need or want to sell, you take a loss. When you buy a stock you expect it to go up in price, as later buyers bid up the price. If a stock does perform as expected, seriously consider selling. Take small losses; avoid the situation where you continue to hold as the stock declines further in the belief that the stock will rebound and prove you right in your investment decision.

Buy popular companies

In many ways, the stock market is a popularity contest. Rational buyers invest in companies with strong fundamentals, however most people, including fund managers, buy and sell based on emotion and what they think others will do in the future. Buy the popular stocks. When a company loses popularity, sell it.

A stock crossing the 50 day moving average going up in volume often indicates renewed popularity with the company. Current holders have finished selling. Future buyers must bid up price to entice current holders to sell. The rising price scares short-sellers and their buying fuels the rise in price.

Remember that even stocks with strong fundamentals go down in a down market. Seriously consider selling when the stock price falls below the 50 day moving average.

This Wiki aims to provide valuable information to minimize the risk of owning stocks by highlighting stocks with strong fundamentals. Strong fundamentals make a stock popular. Investors are attracted to buy because they believe the price will rise as the company grows in sales and earnings. As a result, even more buyers are attracted who bid up the price.