If you want to win on the stock market, you have to survive first or you need to protect your money and then think about making money.
We’ve talked at stocks4-u many times about the importance of protecting capital and we’ll keep talking so you never forget to apply the right methods.
Our capital protection method has 6 items:
1. Efficient company:
If you invest your money in efficient companies you will be protected, this company has no risk of bankruptcy.
2. Buying Cheap Stocks:
If you buy stocks from efficient companies only when they are cheap your chances of losing money are very low because stocks have a great potential for appreciation in the future.
You should invest no more than 15% of your total capital in each efficient company. In this way you avoid losing a lot of money if the company has future problems and stop making money .
4. Average Price:
If you bought cheap stocks from efficient companies and the stock continues to fall … you should keep buying with the same amount of money …. so your purchase price will fall along with the falling stock … so it will be easier to make money in the future.
5. Reinvesting Your Earnings:
When you make a profit on a stock you should not lose this gain. Use your profits by buying stocks from other efficient companies of your portfolio that are cheap.
6. Keep The Starting Capital:
You should not leave a company while it is an efficient company. Get the gains and keep your starting capital for a lifetime while the company is efficient …. in this way you will not miss out on the great valuations that the company will have over the next 10, 20 30 years.
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