In this video, we will tell you how to deal with stock market tips that come from other people
One of the reasons for doing the video is the major damage that free stock market tips do to the finances of lay investors
We discuss the questions that you need to ask when you get stock market tips
One of the first things that you need to ask yourself is why you are getting quality advice for free
The second question that you need to ask yourself us whether you can understand and make use of the information provided in the tip
You need to be able to understand why certain things are being said
You need to be able to figure what you will be doing with the tip. The question is whether you can make money from the tip
Remember, using certain type of company inside information is illegal and comes under insider trading regulations
Can you establish the link between in the information in the tip and the stock price?
Normally, the lay investor doesn't have the skill to process the information in even actionable information and tips
The next question that you need to ask yourself is whether you are getting the tip or the information at the right time
Typically, the investor gets the information late and after many investors have already acted upon the information
Typically, this would have enhanced the price of the stock in many cases and you will not be able to gain from the stock as much
If the information turns out to be less than useful, the stock, after an upmove falls down
Often, this results in many investors holding bad investments since they find exiting at a loss unbearable
Often, when you invest in a stock due to a tip, you do so without knowing about the company's business and its prospects
Don't put your money in an investment that you can't understand
Ask yourself about why you need to make a quick gain from the tip. Do you really need the money urgently?
More often than not, by acting on a stock tip you take up risks that you don't need to
Making quick gains is the preserve of stock traders. Many traders don't even have that skill
An lay investor typically doesn't have the skill, the information and the tip to act on stick tips
The sum and substance of the discussion is that tips can never substitute meaningful analysis of the investment proposition
When buying stocks, you need to check out on the same old things like fundamentals, earnings, prospects, competition and so on