“Rule No.1: Never lose money. Rule No.2: Never forget rule No.1." - Warren E. Buffett

Saturday, August 09, 2008

Depend on your own, do your homework

When the markets are bullish most financial gurus think they will never go wrong, only to see the bear shatter their delusion.
When the market is bullish, and the relentless bull run inspires so much confidence in everybody that they start to believe they would never go wrong and know, how to choose the correct share and the perfect pattern to trade,Normally everybody thinks of himself a Warren Buffett, and offer suggestion and predictions about the market, and see their suggestions go right without understanding the basic bull run. At this point of time you can see a lot of their Friends, neighbors, and colleagues, stand still astonished on the investment ideas of these men and follow him in every part of the investment, without caring a single percent of educating themselves about the basic things of the market and leave their hard earned money in high danger. Well, when the wind changes all of a sudden and when the bear takes over the market, its needless to say they find themselves completely on the wrong foot.
Here the point is you may come across a friend or neighbour who would fit in this category, on the time of bullish market offering you free advise, but taking all these type of suggestions and making investment will save you only the percentage fee, not the loss of your investment. Because when the bear grips the market they will run away, and the investors would be left in the dark so clueless about the market that they can't even take a decision.
Since, it is a must for the investors to educate themselves about the market, rather than simply follow their friends or neighbour's advice blindly, they should make an effort to understand where they are putting in their hard earned money and what could be implications if things go wrong. It is always better to the advice of a professional, and even then follow his advice only if you are convinced. Check their portfolio to find out how they have fared?
Relying on friends, and neighbours for investment advice will look easy, but it can have disastrous consequences .
Learn the basics rather than depending on the baseless.