Limiting Your Losses When Investing In Shares Or The Forex
When you buy shares, do not buy just one stock. Buy four or five at least. The most sophisticated professional can often do no better than pick seven winners out of ten selected. Suppose he had bought only the wrong three that he thought were right at the time he bought them!
When you invest in currencies on the Forex be just as cautious.
This is good way to limit our losses and help us stand a better chance of making a good return on our money in the long run.
The exception to the rule concerns cyclical stocks. These are stocks of companies whose well being depends on the ups and downs of business. Cyclicals are well known and are generally the heavy industries, both producers’ goods like machine tools and consumers’ goods like automobiles.
They feel the effects of recession and depression more than any other industries. In a recession they fall the most and in a comeback they rise the most. In order to play cyclicals you must watch the trend of business like a hawk the New York Times Index, the Federal Reserve Index and other measures and read the business section of the...
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