Seeing as how the stock market has been taking a hit lately, I bet a lot of you are considering picking up some stocks that have gone down. I personally do not see this as a terrible idea, but I think it is a serious decision and you should watch out for a couple of things:
Stocks go Up and Down
This is an easy thing to acknowledge when the market is pretty flat, but when it becomes more volatile people tend to panic. This is exactly what a lot of people are doing now. The thing is even if you buy stocks for cheap now, they make go down even more before they go up. Does that mean you shouldn't buy them? Well not necessarily, but you need to be patient and control your reactions.
Balance is Key
By having a diverse stock portfolio you can rest assured that even if some of them are going down, the loss is minimized because it stretches across the boards. Since most companies are not planning on going out of business, it is a safe bet that your stocks will level out EVENTUALLY
Do not "Hope and Pray"
The biggest mistake people can make is just blindly putting money into any stock. You want to do your research about a company to make sure it is in financial shape. An easy way to track general info. is through news sites like Yahoo Financial.
There are a lot of other things I could mention, but these are a good place to start. Remember to ask any questions you may have.
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