Have you ever traded any stocks? If yes, discuss how you personally decide about

Question

Have you ever traded any stocks? If yes, discuss how you personally decide about your portfolio(Have you change your methods in the past few years). Do you buy the majority of your stocks for a short sell or not? Which market/s have you used for your tradings? Do you prefer riskier stocks with a higher return or do you think of yourself as a risk-averse person? Explain why you find your method of trade the best.

If you have a very successful trading story feel free to share it with the class. If you never traded any stocks, Discuss which market would be your preferred place to trade. What kind of stock you would choose and how you would determine the shape of your portfolio. (Basically, think about the questions above and try to answer how you would approach them if you want to start trading) Different financial institutions use various approaches to their trades and shaping their optimum portfolios. Most of them expect their potential employees to have a clear idea about the benefits of their approach and their objectives. Some companies like Dimensional fund advisors use more advanced financial methods such as more developed versions of the 3-factor model initially introduced by Nobel winner Fama and French for their trades. More companies are getting attracted to this approach

Explanation / Answer

Yes I invest in stock. Initially I had no knowledge of stock market but due to one of my friends emphasis I jumped into this. Then by the passing time I started to dicuss the ups and downs and some key happenings in stock market with my friends and this worked well for me. Since then I don’t rely upon luck to earn profits. In our quest for success, we often overlook the most powerful tools available to us: time and the magic of compounding interest. Investing regularly, avoiding unnecessary financial risk, and letting your money work for you over a period of years and decades is a certain way to amass significant assets.

I kept thinking Why am I considering investing in the stock market? Will I need my cash back in six months, a year, five years or longer? By knowing how much capital I will need and the future point in time when I will need it, I could calculate how much I should invest and what kind of return on my investment will be needed to produce the desired result. To estimate how much capital I am likely to need for retirement or future college expenses, use one of the free financial calculators available over the Internet.

Remember that the growth of your portfolio depends upon three interdependent factors:

Ideally, you should start saving as soon as possible, save as much as you can, and receive the highest return possible consistent with your risk philosophy.

By understanding your risk tolerance, you can avoid those investments which are likely to make you anxious. Generally speaking, you should never own an asset which keeps you from sleeping in the night. Anxiety stimulates fear which triggers emotional responses (rather than logical responses) to the stressor. During periods of financial uncertainty, the investor who can retain a cool head and follows an analytical decision process invariably comes out ahead. The biggest obstacle to stock market profits is an inability to control one’s emotions and make logical decisions. In the short-term, the prices of companies reflect the combined emotions of the entire investment community. When a majority of investors are worried about a company, its stock price is likely to decline; when a majority feel positive about the company’s future, its stock price tends to rise. The popular way to manage risk is to diversify your exposure. Prudent investors own stocks of different companies in different industries, sometimes in different countries, with the expectation that a single bad event will not affect all of their holdings or will otherwise affect them to different degrees.

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