Avoid Stock Market Tips Given By Irrelevant Sources – Minimize Risk
It is often seen that people purchase shares just because some friend purchased it or have recommended it. Even though this news may be true but it is not necessarily it is a next big thing, and you accumulate the shares in huge quantity. There are also few commercial TV channels that express their views about some stocks of a particular company. It may turn out that they are paid to break such news so that prices rise / fall. And once you buy /sell share prices will fall/rise. A point here is you are not the only one watching that particular channel. There are thousands out there viewing the same channel as yours. Such things are nothing more than tentative talks.
Though few stock tips are accompanied by logic, reasoning, analysis, and calculations, and may come true. One can depend on these types of tips or recommendations. It is better to take these with your personal common sense and research. Research about the promoters, take opinion from other unbiased traders.
Generally, people buy/sell shares by analyzing them by the criteria of 52 weeks high / low. They use this as thumb rule that is, to purchase stocks which are trending towards its 52 weeks low, so that they will now rise. Or sell stocks which are trending towards 52 weeks high, as there will not be much chance of appreciation. There may be a reason for company’s share price appreciated or depreciated depending upon the conditions at that time of the year. It is not necessary that those conditions may be same this year too. One should analyze the reason of rise or fall of a price before coming to any conclusion.
Change of CEO, competition conditions, company’s fundamentals and other conditions at that time of the year affect the price of shares at that time which at present time may not be true or viable. It is important to view all these factors why prices are low, it may give a false buy signal.
One should buy shares of a company which you think will have a sustainable growth path. Never purchase just because they are available cheap. What if the company is unable to recover from its losses? You might lose your investment then.