Lessons I've Learned (The hard way)
These are the lessons I have learned (so far) in my share dealing activities. I
do not claim to be the first person to have discovered these lessons, in fact I'd
actually read about some of them before hand and still managed to learn them the
hard way!
#1 Good news can often mean the price goes down
Often when a company releases good news or good results the price can go down? This
is becasue the news/results are expected and the price has already risen to reflect
this and when the news/results are confirmed short term investors sell to take profits.
Even though I new this becasue I was aware of the saying 'Buy on the rumour, sell
on the news' I still manged to mis-time the selling of my Christmas retail stocks.
#2 Do your own research
If a broker/guru/friend/bloke in the pub tips a share then thats all it is a tip,
there are no guarentees. Its up to you to reaserch the tip and see if you come to
the same conclusions.
#3 Sometimes shares don't play fair
I learned that even if you do you own research, invest in a low risk company which
is considred stable, things can still go very worng. I lost 16% after investing
in 'Tate & Lyle' after it was Barclays share of the week.
#4 Time your trades
In July 07 I bought some shares in BSKYB because I believed they would come off better after their recent dispute with Virgin Media.
After holding for several weeks the SP was static and I sold. However, just the next day BSKYB released good results and the share price rose, just like I had expected.
I had made a grave error of not checking to check the financial calendar to see when BSKYB’s results were released.
In future I have vowed to check results and ex-div date before I buy or sell.