| There are a few simple guidelines I go by when I'm | | | | Price is Overrated |
| thinking about buying a stock as well as when I'm | | | | Ok lesson number two, price means nothing. All price |
| considering whether or not to keep or dump a stock. | | | | is, is a value assigned to the stock relative to how |
| These guidelines have helped me take my mediocre | | | | many shares there are available. |
| income and turn it into one that is a bit more | | | | Buy stocks based on their average growth compared |
| advanced for my age group. Now I'm no Jim Cramer | | | | to the industry. You can find this on any finance |
| or anything, but I do know a thing or two. | | | | website. Use Yahoo! finance if you don't have a |
| I know this. Anytime throughout my stock buying | | | | broker account. If this stock has better growth than |
| career, if I have lost sight of these guidelines I'm | | | | the industry, it's possibly a good buy, but there's |
| about to reveal to you, I have either not made | | | | another thing to look at. The balance sheet. |
| money, or I have lost money. They are very | | | | Be Cautious of Debt |
| important to my success and should be considered | | | | Don't go buying a stock just because it has good |
| very important to you as well. So here are my, how | | | | earnings and good growth. You want to check out |
| to pick a stock, guidelines. | | | | the balance sheet to make sure they're not in debt |
| Use Limit Orders | | | | up to their eyeballs. A stock price can skyrocket |
| First things first, always use limit orders when buying | | | | while a company is growing, but growth means debt |
| stock. The commissions are usually a tad higher on | | | | and sometimes debt can catch up with a company in |
| these by a couple of dollars, but if you're buying 1000 | | | | a harsh kind of way. Be sure they're not taking on |
| shares of a 4 dollar stock and the price jumps 20 | | | | more debt than they have income in a year. This |
| cents before the broker can get your order in, well | | | | spells disaster for a stock price, and for your |
| you've gone from paying 4000 (plus commission) to | | | | portfolio. |
| $4200 (plus commission). | | | | Ya Gotta Dig Deep |
| If you had used a limit order, you could have said, | | | | Next, do more homework. Google the company and |
| hey dude, I'll give you a couple more bucks if you | | | | see what kind of information you can find on their |
| don't buy this stock above $4.03. Then you would | | | | management, any kind of internal information that is |
| have saved yourself a couple hundred bucks getting | | | | public, any kind of mergers that may be happening, |
| into that one. You also need to do this when selling | | | | etc. This kind of stuff can effect stocks drastically, |
| stock | | | | as in the case of AT&T / Bellsouth just recently. |
| Tell your broker, hey buddy, don't sell my stock for | | | | There's plenty more to investing. I don't want to |
| any less than xx amount. This way, if the stock goes | | | | write a book here, but follow these few rules when |
| back down before your broker can get to it, you're | | | | you're investing and you'll be well on your way to |
| not losing money on the simple price fluctuation. | | | | being profitable in the stock market. |