It is not difficult to be an investor. You do not have to be perfect. Generally you need to picks a few good stocks. However, everyone makes mistakes and they will not be deadly to your portfolio. If you pick a loser or two it will not affect your long term gain if pick some mediocre stocks and a few winners.
This is assuming you are a conservative investor. The people that lose money on the stock market are the ones going after risky stocks or the next big thing. The people that lose money act on the latest hot stock tip they have heard.
Look at the Dividend Achievers Index stocks on the TSX for good picks. Also, most large Canadian Mutual Funds have the same stocks for their 10 largest investments. These are very good places to get generally good solid companies to invest in. The exception I would make is concerning resource companies. They can be on both these lists but tend to be riskier than other stocks and I would not suggest owning them.
An easy way to tell if a stock is too risky is to look at the Beta Ratio. This should be around 1.00 or below 1.00. Certainly, if it is at 1.25 and above it is probably too risky.
And remember, there are money studies that show the more often a retail investor trades, the worse are their results. This would mean that buy and hold is the order of the day. You are going to buy some dogs when buying a stock portfolio. However, that in no way will stop you from overall doing just fine.
On my other blog I wrote yesterday about IBI Group Inc. (TSX-IBG, OTC-IBIBF)... learn more. Next, I will write about PFB Corp. (TSX-PFB, OTC-PFBOF)... learn more on Friday, November 24, 2017 around 5 pm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
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