Vendor, I presume that most people reading these posts have above average intelligence, so give me a break. The reason I mentioned intelligence is because I know a lot of intelligent people who are terrible at investing. Put simply. they let their emotions control their trading behaviour.
For example, I have a good friend who is a doctor who never trades in shares, largely due to that fact that he's a pussy (I love anonymous online forums). Last year, on the advice of his accountant, he bought $40K worth of NAB at $26. He sold out at $22 because he panicked after watching all the doom and gloom on the news, thinking he'd be better off taking a $6K loss than risking losing much more. Ha! This is a specialist surgeon, a very intelligent guy. The problem was he got scared. He didn't have the nads to average down, and this was a blue chip share...
I was only implying that people should use their intelligence and not their emotions or silly "golden rules" when trading shares, and always take the advice of brokers or financial advisers with a pinch of salt. Instead, read company reports. Learn to analyse financial statements. Read the newspaper. Study graphs and market debth. Above all, think for yourself.
Probably the best advice I would give to anyone new to share trading would be to NOT use one of the major broking firms. Their advice is often conflicted, and their brokerage costs my seem small in comparison to the size of your investment, but they are insidious costs which add up over the year and eat into your profits. One of the best things I've done in investing was to trade through an online broker, and stop listening to the advice of dodgy stockbrokers, who tell you to buy the stocks that they're trying to sell (or so it seems).
For example, I did 73 trades last financial year with Bell Direct, for a cost of $1080 ($15/online trade). The same number of trades with my previous broker over the phone would have cost me $6424 ($88/phone trade).
PDY Price at posting:
3.2¢ Sentiment: None Disclosure: Held
