Your Cash

Lets be honest there is no sure way of picking a winner. But, there is methods of improving your odds greatly. first you must understand that a stock is peice of a company. If the company does well it should reflect in the stocks price moving up. There are also other factors that drive a stock price for example, the overall feeling of the market can be negative, driving most stocks down(like high oil prices or other major curent events like wars & disasters...)Also, moving the stocks price is supply and demand. For instance if alot of people want to buy stocks from company x but there is a limited supply of shares(shares stocks samething)that too will drive the price up.You must understand that stocks are classified by the companies market value(thats the share price times the total amount of shares.)A company like Microsoft is a large cap company or even considered a mega cap. These large caps like Microsoft, Walmart, Citigroup usually move slower in price compared to midcap and small cap companies. Midcap and small cap companies are usaually considered growth stocks.Although you might capture bigger gains with the smaller companies, the risk is ussaually higher. Although this principal is not always neccesarily true.Lets first begin by exploring ways to avoid picking a loser or simply losing.
The most common rookie mistake is chasing a stock. That is simply looking at a chart, seeing a stock that has recently gone up alot in price and assumming it will continue to do good and buy it.Although this might work sometimes, it is definitley not a reason to buy a stock.Rule number 2 do not buy on someone elses tip with out doing your own research! Be carefull when investing in a sector which has recently done great and has reached its peak like the energy and oil sector. Newbies finnally have enough courage to enter the market when its too late and everyone is leaving and supply floods the market and stocks in that sector go down.(not good)Investing with no knowledge of the markets is also a mistake, educate yourself first.
Ok I will be back for the next part hope you learn something .
God bless Mr.Cash