Investing in Shares

See also Investing in Oil.

As Warren Buffet says,

"Be fearful when others are greedy, and be greedy when others are fearful"

New York Times Online, 16th October 2008

Or to put that another way, sell when everybody is greedy and buy when everybody is fearful ... but you have to be patient, as fear like greed and hysteria can last a long time but if you pick the right stocks, then you can make a killing.

There are three ways to lose money on the stock market. They are greed, fear and hope.

Greed

There are two aspects to holding shares. One is to receive dividends and the other is for the share to increase in value. Many people advise to "take profits" when the share price has risen by a large amount. Often, but not always, people who get greedy do not take the profits because they want even higher profits and then watch as the share price reduces.

Fear

One of the ways to lose money on the stock market is to be afraid to trade.

Hope

A common way to lose money on the stock market is to live in hope. This could be the hope that a share price will rise in the future or it could be the hope that a share price, that has fallen very badly, will recover.

Do Your Own Research

Never trust any pundit or commentator for information. Always do your own research into the companies whose shares you are interested in. A good start would be the companies annual report. These can be obtained free from