I’ve been investing in the stock market for over 20 years now I have been fairly successful. It’s allowed me to quit my day job and do it full time. I’ll admit I had a few lucky breaks at the start which gave me enough money to make larger investments and my portfolio has increased since then. I’m always on the lookout for a good investment and it seems like the rest of the world is too. I’m constantly being asked my friends and family members what are the best stocks and shares to buy? I always give the same answer, it depends on what type of investor your are and what you know.

I’ve never been comfortable dealing in stocks in an industry that I know nothing about. For example, take the automobile industry. I have a car and I drive it from A to B. That’s about as much as I know and exactly how much I WANT to know about cars. I wouldn’t dream of investing in a company like General Motors or whatever as I simply don’t know enough about their business. I wouldn’t be able to tell if a decision at boardroom level was good or bad and that for me is a big no no in the investing world. So my first piece of advice is to invest in a business that you understand.

My next piece of advice is about what type of investor you are. There are lots of people out there who are looking to make a quick buck by following day trading strategies and forgetting about the long term aspects of playing the stock market. If you’re in it for the long term, the type of investment you’ll be looking for will be radically different than a day trader. You’ll be looking for a company who’s price is currently undervalued for their earnings and worth, and one that you’d feel comfortable owning in a years time or even 10 years from now. Day traders are obviously looking for a quick turn around and so will be looking for a bargain simply for that day. I’m slightly bias in that most of my investing experience has been for the long term and following the value investing technique so I tend to slant my advice in favor of that method.

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