Michelle Khang Dot Com

Some people live on earnings from their stock market portfolio while others make a killing just by understanding the mechanics behind what drives the forex market in different directions. Whether you like it or not, these are all forms of gambling. At the end of the day the only people who will profit from this (gambling in any form) is the person who has done his or her homework.

Let me delve further into this. Let’s take Amy who has no prior knowledge about “investing” (that’s what they like to call it) in the stock market and compare her to Bob who has been keeping up with the stock trends and has been watching the bottom line profits of a couple of blue chip companies that he has interest in.

Both of them decide to enter the stock market at the same time, after 12 months who do you think came out on top with a profit? Amy would have listened to market rumours and followed the “intelligence” gathered from this so called inside information and went ahead to buy many shares that were rumoured to be going up further! The only problem is when Amy buys a share the next day it would have closed at a lower price. Why? because sound stock market investments are not made by following the crowd but are made by careful long term analysis of the real value of the company and knowing their long term plans plans as well.

Then we have Bob who has been reading the Wall Street Journal and has been quietly analysing the value of certain Blue Chips and even a few start ups. He was been tracking their performance over the last year and has not even made his move yet, he doesn’t own a single share yet. Right around the same time as Amy enters the market Bob moves in too.

A year later Amy is desperately trying to sell her share as they as loosing value as the days go by. Bob’s shares on the other hand have not only gained 10% in value they have also earned him dividends. On top of that Bob made some extra pocket money writing a few covered calls over the last couple of months after attending an Options Seminar.

My question to you my friend is Who Do You Want To Be?

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Let’s face it you definately want to be Bob. I can tell you that there is no short cut to wealth. The only way to make continued profits from any form of ‘investment’ is to empower yourself with knowledge. Before you jump into any form of investment do your research/homework, even if it takes you 6 months to gather the data, you’ll be doing yourself a great favour.

Once you find that you are already making a nice profit from it, don’t stop there. You need to continuously keep yourself updated with the lastest trends and techniques.

as KNOWLEDGE is POWER!