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Is it possible to beat a market?
Very often happens that many people, half the time it concerns young people, giving way to excitement and advertising that tells about unbelievable histories of frequent capital increase at investing in securities, break in this market with the hope on instantaneous and dizzy success. According to statistics, up to 90\% such investors leave a fund market during first-year without greater part of their former facilities.
If you refer to the number of the people who makes a decision to begin investing through a fund market, it will be useful for you to get our advice, and if it is possible to follow them in future, this, unfortunately, don’t do those 90\% beginning investors.
Is it worth being engaged in investing?
Definite answer is yes and the earlier you begin it, the more you will be able to save and increase, even if you would lose facilities at the beginning, because your whole life is ahead and also there will be possibility to earn facilities for investing in return for the lost facilities, but instead of loses you will have invaluable experience that with the lapse of time (usually it takes 2-3 years) will bring the positive results.
So…Is it so possible to beat a financial market and get superprofitableness?
Yes it is possible in a short-term moment, but in a long-term prospect it is possible for few people who become the heroes of publicity histories.
As it was said in the previous articles, there are many different players at the financial market, and each of them tries to get a profit out of it, these are brokers, banks, portfolio investors. To beat the market means to take away money from these super specialists. Not everyone can do this. Therefore at the beginning you shouldn’t to set impracticable tasks and count on a multipercent profit relaying only on your own small experience. Also, you shouldn’t think of the financial market as a casino, you need to fight for your facilities but not to give them to the professional players.
It is important to set a minimal goal and to go towards it. It is especially important in the moments of strong shocks to watch daily and attentively after the market, but do not yield to panic, just follow your reasonable idea. Remember, the effect of panic is very often used by professional players for earning their money.
In these periods a lot of articles can appear. There can be indeed good ones, but in most cases these articles are sponsored and brought in by the professional participants of the market and called for forming panic and consequently unrealized mass gusts. It enables professionals to earn enormous facilities on your hasty actions. It is very difficult to stay calm in such situation.
One of the main traders rule sounds like: do not go against the market, but feel the changes of the trend. Wins the one who notices the beginning of the changes first. On the other hand you shouldn’t fall into despair at the first failures because you have set for yourself a very difficult task - to beat the professionals, which have sources of information and sometimes the insider information at their disposal, and also working hours for such analysis, because they are busy only with that, and enormous financial resources in order to carry a project out and move the market to any, interesting for them side.
There are three main conditions to our point opinion. If you completely adhere to them you can at least be steady at the market, and in the best case, getting sufficient experience, you will learn how to earn money with its help: how to choose the strategy, control emotions, study constantly the market and finances.
From all strategies, we would like to mark out the two basic ones, these are daily trade and fundamental investing. Often, amateurish investors get carried away with the daily trade, spending many hours in front of monitors with exchange information and trading on-line. The choice of such strategy of investing can do for young people or for people temporally not busy with the basic work. For investing in such mode you need the great proficiency of technical analysis and the usage of multiplier for the increasing of the level of daily earnings. Such strategy has only one limitation, it limits the choice of shares and therefore you can work only with high liquid shares, in fact, only with the blue-chips.
The second strategy is more suitable for those who consider the fund market as the additional mean of investing their facilities and they are not ready to waste the whole time on this process. In this case, person gets his portfolio for a longer spell of time, half a year or one year, it depends on the fundamentally search of attractive companies. It is more laborious process, requiring the special knowledge in area of finances and good analytical capabilities for the analysis of financial activity of companies and market on the whole.
One of the most important rules in both cases is to follow your strategy. Also it is important to stick to the second important rule – control your emotions, because 50\% of your success will depend on this ability. Very often, only one unjustified motion based on emotions can cause the instantaneous losses of large money sums. After a while, comprehending our actions we understand that we made a mistake by changing at the last moment the before chosen strategy. One shouldn’t forget that on other end of the system, your opponent is a professional, the basic task of which is to force you to make this mistake and to give in to emotions, and he is using the great number of facilities for this.
The third rule that will help you to open new possibilities is a permanent study of financial market and increasing of the general financial literacy. At the beginning it is very difficult to understand the enormous volume of information which can change in the flow of short interval of time. In course of time, an experienced investor defines for himself the basic indicators and their interconnection. Especially this is important for those investors who are using the second strategy of trade at the market. Except this information you will also need the additional fundamental knowledge, especially for those people who haven’t studied the financial disciplines before. For these people it is necessary to get the notion of book-keeping, economy and macroeconomics. Also it is recommended to take additional courses of basic financial analysis and estimation of activity of companies.
As an alternative to the own participating in investing, it is possible also to participate in ration funds or hand your facilities for the management to the professional participants of the market on the primary stage. In this case the risks of facilities loss goes down and also appears the possibility to study, if you attentively track the portfolio, formed by professionals, and if it is possible, get the explanations about the changes made by them.
Summing up the total basic recommendations, it would be desirable to underline that a fund market is one of most profitable widely accessible financial instrument, but also the most risky, that doesn’t forgives mistakes or ignorance of financial bases. The usage of this instrument in course of time can bring you a high profit so it is recommended to start your education as earlier as possible in order to learn how to get your investment profit.
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