Amateur investors should pay attention to what?

You have little knowledge of finance, but if you have enough "courage" to invest in the market? You know the investment will be profitable not small, but if you have to make sure you will not have little "luck" does? The advice that you get enough to make sure you become a successful investor? You know what to pay attention to these factors in the investment world?

If you still feel a little anxious or confused, the financial investment expert of CNN / Money will help you.

Part 1: wise and careful

1. Sometimes the amateur investor has an advantage over professional investors. Professional investors always haunted by predictions that if they beat the market or not. They may feel stress when holding or buying stocks at the market is flooded. But investors would not consider amateur careful and thorough research to such investment in its operations. When the market began to stir, difficult to control, they just seated, calm focus on the long-term goals.

2. Investment money is reasonable actions more important than trying to find the next Microsoft. In the long term, you can profit from investing in stocks and bonds tend to be compatible with the average level of volatility in the market. So, you should allocate reasonable financial decision how much to invest and how much stock into bonds.

3. You can split the investment with big money and relaxed mood without knowing how to learn to earn lucrative stocks. Put 60% of your money into the stock market and the remaining 40% in the bond market. Within 10 years or a little longer, you will achieve better results than most other investors in the market, both professional and amateur.

4. All investments involve risk.

5. Diversification of investments is a great cardiac medication for investors. The inflow of spreading yourself out of the stocks and bonds of different wise decision. This will reduce the risk and increase the rate of gain more profit opportunities.

6. Investors are generally adept at a conclusion that in the long term, stocks will return more than bonds and bond cash more effectively. However, you should alert, do not always receive the same is true.

7. Pay attention to the decline: The Sport Athletes call it performance degradation. This is the period when the athlete falls into crisis after the peak. On the stock market, the same thing often happens with companies overheating. Investors tend excited working on fast-growing companies, but no one can take this game forever, because even the fastest-growing companies can also fall into decline withdraw at any time. Take more time to think and analyze about this phenomenon, which decide when to work and when not to.

8. Do not use your money to invest in the target markets that kind of trying to buy the shares at the highest price or the lowest. Researchers are still looking for a way to accurately determine the market at any time in the ceiling and the floor at any time, but this can never be known.

9. The average rate of capital investment: Investing with a certain amount of money every month or every quarter of the year is the best and only way to keep you on the path they have chosen.

10. Rebalancing. You should spend 60% of their money invested in stocks and 40% bonds. If a crisis and shares accounted for 75% of your investment, you should go to re-sell them at a 60-40 balance. This way, you will be able to eliminate the stocks are becoming more expensive and are less expensive than buying. It is a buy cheap and sell dear.

11. High profits are always associated with greater risk, but do not have any obvious risk also leads to higher profits. Prior to the appeal of the huge profits, a smart investor will not engage in a risky investment if he did not see the maximum safety. During this time "bull" stock market raised excessively, you can take money from the passion of its shares, or simply a company that you think will be successful can explode any anytime.

12. You may not know his face any risk, until you suffered actual loss. Just like the case of food poisoning, the risk is something very difficult to understand theoretically. A harsh truth is that Nasdaq has "buried" do not know how many tech investors who think they can not hurt.

13. Rule 72. Another trick to calculate how much you will need time to double your money. For example, how much you have to spend money in order to move into 2000 at the 1000 level of 8% profit? Take 72 divided by 8, you have 9 years. From this example, you can calculate yourself profitable period.

14. Reinvestment. If you earn 6% return on the bonds in 1000 to spend all the money and words, then after 20 years, you will have the 1200. But if you reinvest all the profits, you will have also the same in 2662 after 20 years. That's the power of reinvested - I will return the profits generated.

15. Start early. For investments, the more you spend much time on it much, you will gain more profit as much.

16. Save more: Another way to increase profits is set aside a certain amount each month to small investors. Over time, the money that will grow into the thousands of others.

17. When you plan for the long-term goals, you make sure that all of your investment will be profitable 5% to 6% / year.

18. When you buy a stock, you think it will be profitable for you, but you should remember that you have to buy the shares from someone also feel satisfied when they sell.

19. Do not rely on the authorities. Investors need to look sober and realistic about what government can do and what can not. The authorities will certainly accelerate the finding of fraud and force companies to reveal more information and greater transparency. But investors often use an inefficient way of information they get from the public. How many investors have actually read and analyze the report of the annual IPO prospectus before making investment decisions? No regulations have forced investors cautious decisions or keep the market out of recession.

20. Do not let tax considerations influence your investment decisions.

21. Want to earn profits? If you watch TV in the afternoon, it's better not to see your financial information business. You really do not know what happened to the shares of the company, instead watch your favorite programs. Simply because the moment you do not need the insight and analysis in order to avoid the temptation to entice you into the new investments with higher risks.

22. Here is the difference between investment and speculation: investors prefer to buy stocks as a business deal and will hold for a long time, and speculators look like the paper stock and they buy them in the hope someone would outbid.

23. Growth rate will control the company's stock price. There can be large differences in stock price from year to year, but in the long run, stock prices will fluctuate based on the revenue and profit of the company - if a narrow profit on the price shares will decline, even if profits grew bigger then of course the stock price will rise.

24. Before deciding to buy a certain stock, be prepared "speech summary" to convince yourself, suspicious wife, your dog, or anyone else, and explain why you want to buy shares. It has to be a growth stock, and stability will create a miracle in terms of revenue? Does your investment strategy with a reasonable offer? Does the financial balance of the company was healthy enough? Does this company have prevailed before the competition? Simple when you say these things, you will have to focus more on what you think and what you have studied, analyzed. Ultimately, this can help you avoid the risk of loss.

25. When you take a minute to think, you just spend a few minutes further to wonder why you should not buy the stock. Does the company have sunk deep in debt? Does the CEO have reliable or will not "slip as scout" when in trouble? Does the stock price is too expensive to buy? The capture information that will not only help you understand more about the company, but also help you calculate the time to sell their shares.

26. The big companies do not necessarily make good stocks to buy. Simply because if you only invest in companies that are leading the market, then your income could be very high, however, once the largest company in crisis, then your income can be much more severe crisis.

27. Shares may be too expensive at 20 - 100 shares at too low could. You calculate, but not only is the price per share, which is the amount of money you get from each coin in revenue, profit, assets and cash flow of the company you invest in. This you can learn from the assessment rate following stocks.

28-31. Four ways to evaluate a stock

- The rate of price / earnings (P / E): So far, this is still rate the stock assessment using the most popular, because it indicates how much you are willing to pay for every dollar of profit companies.

- The rate of price / sales (P / S): This index can be used to recognize companies that have stable business networks, but profits may decline after the overheating.

- The rate of price / cash flow (P / C). The revenue and profit of the company report is a product of the complex accounting rules, so that data can be misleading. Cash flow from operating activities may draw more realistic picture.

- The rate of price / book value (P / B) ratio is used to evaluate all machinery, equipment and other assets, often used when investors seek to target management.

32. The only difference between the Forward P / E and trailing P / E. Index Trailing P / E is based on sales during the current year or the last four quarters of the company. And only the Forward P / E is estimated based on the expected revenue of the company in the next year or the next four quarters.

33. The difference between growth stocks and value stocks. A growth stock will promise a greater return in the future, whereas value stocks have higher liquidity, you can sell at any time at a price higher or lower than the actual value of them. Growth stocks are generally stocks of oil companies also share the value of the company shares consumers always have sales and earnings stability, high reliability levels. In the long run, value stocks have slower growth rates, in part because they tend to be speculative buying in the market.

34. The best way to find cheap growth stocks. To answer the question of whether a growth stock available for sale at reasonable price or not, you see the PEG ratio. To calculate the PEG ratio of a company, you share ratio P / E to growth rate of revenue prediction. If the PEG ratio less than 1.2 means that the stock is a good opportunity for investment.

35. You can start building portfolios of stocks long term with the company 9. When constructing a portfolio Basically, you start with the big companies present in 5 industries fastest growth dynamic. For example, you can choose A in the technology sector, the pharmaceutical sector B, C in the financial services sector ...

36. Do not put more than 10% of your investment in the shares of your company. If you are required to hold an amount greater than 10% - possibly due to the company's rules - you try to spread risk by investing in more stable areas of your field. For example, if you work for a tech company, then get yourself the shares of industrial companies pay fixed dividends.

37. Do not put more than 10% of the share capital in a company you. Lessons such as Enron and WorldCom is clear proof for the statement that a portfolio is too concentrated will increase price instability and increase the risk of losses.

38. The shares distributed will not make you rich. The stock split is necessary to invest, but the wide dispersion process can be very counterproductive. When you split stocks to invest, you will not be richer or poorer yourself before. For example, after the distribution of shares, you end fiscal year with twice as many shares, but we are dealing with only half the price. However, some investors see the scattered signal of the investors to diversify much more attractive company. But then, the study showed that the distribution of shares is generally less profitable than the non-distributed, if your investment time only one or two years.

39. Looking for information to learn about the company by reading the quarterly financial statements or annual. You can also find information on the company's website on the Internet or management agency securities market.

40. According to police the stock market index. This is the strategy to buy back shares worth most profitable in January each year. You keep them for a year, then sold the shares declined the most in the list and buy a stock alternative.

41. IPO will not be as expected. In the heyday of the Internet company, people want to work on the issue of securities to the public (IPO). However, the IPO did not produce results in the long run. These shares usually provide most of the profits in the first trading day, then, the new issue will just "limping" on the market in the coming years.

42-45. Four good reasons to sell stocks. You do not sell the shares because they lost or because market prices have come down signs. The reasons to sell their shares is:

- First, a few important elements of business profits or prospects of the company has changed from the time you buy them. - Second, you realize that the identification, your previous assessment of business operations and prospects for the company's profit is wrong. - Thirdly, the company you're investing so that they work better than expected - the stock price rises above the level that you believe reflects the true value of the company. - Wednesday, stocks that currently make up a large portion of your portfolio that increases risk.

46. You transactions, the more profit you get less and less likely. You buy and sell as much of your portfolio will incur transaction costs higher. Think about whether you can beat the market with smart ideas? A study shows that fund managers usually do not increase profits by trading on the stock market. If these transactions often cause damage to professional investors, it can also adversely affect you.

47. Investment limit allowed. You borrow money from the broker and pay interest to buy more shares. This seems to bring more profits, but also losses may also bigger. If you hold shares fall below certain levels, your broker will ask you to refund part or all of the debt immediately. Therefore, buying themselves out of limits is a risk that investors should stay away from amateurs.

48. What is short-selling investment?. Investors "short-seller" will borrow shares from a broker to sell shares in the hope this will go down and he can buy back at lower prices. However, high cost, potential loss, and the stock price rose even after a long period of freezing will cause the desired revenue shares from investors "short-seller" becomes illusory. This is something that you should avoid.

49. The difference between market orders and limit orders. When you place an order on the stock market with your broker, you are required to buy or sell shares at a price matching. But the restrictions set direction brokers buy and sell stocks at a certain price, then this price is used as an effective measure to protect you in a constantly fluctuating market. If the stock price does not reach it, transactions will not be performed.

SECTION 4: BONDS

50. The basic rules of investment bonds. Bond prices will fall when interest rates rise and vice versa. Why? If you own bonds at an interest rate of 6% and interest rates rise, this time, bonds will pay interest at 7%, 6% so your bonds will lose value.

51. If you invest in bonds and hold them until maturity correctly, you will never lose money. Government bonds, checks never default. Municipal bonds and corporate bonds rarely default (long-term default rate is only approximately 1% to 2%).

52. Sale of shares before maturity may be a mistake. Unlike stocks bonds - they are not traded every day and not many people would be willing to buy bonds when you want to sell them. So, if you are forced to sell bonds, you may have to accept a certain amount of damage.

53. How do I just do not have the money loss? In the bond portfolio, you should hold stocks with different maturities so that you can have money in any given year. This allows you to take advantage of high interest rates to buy other bonds, while minimizing risk.

54. You can lose money by investing in the bond fund. Every day, the value of the stocks in the portfolio of bonds fluctuate depending on the fluctuation of interest rates and other factors. Therefore, the value of all Fund assets invested in bonds also change. So, when you sell shares of the Fund bonds, the stock price will be lower - or higher - than when you buy them.

55. What is Zero-coupon bonds. Zero-coupon bonds (zero stubs) will have no interest, instead, you buy bonds with lower price value. When shares are due, you will receive that amount includes the original investment amount plus the amount of difference from the original price of shares compared to the purchase price. For example, you may have to pay 6659 dong and got 10 thousand dollars zero-coupon bonds is 4.15% and return on maturity in 10 years.

56. Stubs (Coupon). This is a fixed interest rate that you can receive each year from the number of shares held.

57. The average value (Par value). This price is interpreted as the nominal value of the bonds, which is the amount that a bond issuer agrees to pay at maturity. Typically, bonds are traded at higher or lower than the mean value.