Some guidelines to help you avoid common market pitalls

• Do not begin investing in shares
Capital markets are not composed only of shares. Stock shares are very exciting and more dangerous – so they should be more profitable over time. But for a first “taste” of the market do not have to run right to buy shares, and certainly not individual stocks. It is much better to start with less risky assets like government bonds, or via mutual funds and ETFs. If you want to learn about some safe investment tools then look into some safe investment tools.
• Do not think you’re smarter than the market
One of the greatest dangers to an investor is an exaggerated sense of security. It’s a sense misleading the most sophisticated and experienced investors. Confident people tend to fall in love with their decisions, and find it difficult to admit mistakes and thus make suitable changes.
It is very possible that you’re lucky selecting this high gain stock and not the next Buffet. It certainly does not mean you are immune to mistakes. Sometimes these mistakes will be clarified only when you reach a bad market. You can be happy that you have made a profit, but do invest your time in the places where you haven’t shined so brightly.
• Do not invest all the money at once
An investor who only begins to invest in stocks should start small – a few thousand dollars.
Investment in stocks requires a long learning tuition. Tuition is paid over time, especially during periods when the market is not so welcoming (as it is now …). An investor that enters the market for the first time should bear in mind that the maximum loss can be up tothe amount of his initial investment. It is possible to recover from a painful loss, but there are only few people who will not blame anyone in this loss….
• Do not expect to finance current consumption with stock market gains
There are many things to know before you buy stocks, but the most important thing to remember is that the investment in shares requires time. Sometimes the profits come quickly and sometimes slowly. There is no way of knowing this in advance, so the main idea is the funds are invested in the stock market are not designed for use in the near future. Those who need money now or a year – should not invest at all in stocks.
Only your surplus income should be invested in stocks, and the goal of this money is which we want to use only as many years to come. Plan for using this money in 10, 15 or even 20 years.
• Do not Think About Your Earnings
As mentioned above, Buffett did say not to lose money, but he as well as his mentor, Benjamin Graham, also said on another occasion that whoever is not able to see shares fall by 50%, should not invest in stocks. Sharp fall in prices from time to time is a fact of life in the stock market. It happened, it happens and it will happen as it is the nature of this market. Therefore, instead of thinking “how we can make a kill in the stock market”, it is best to think first “how we can afford to lose in the stock market.” If you cannot afford to lose more than 15% of your available funds, do not invest in stocks more than 30% of your money.
• Do not listen too much to friends, acquaintances, and family
Unless you have a relative or friend which is an expert with the receipts in the capital market (and even then …), there is not much point in listening to idle conversations on the market. It’s nice as a topic of conversation, but the benefits you can get a result are doubtful. Instead of listening to friends and family, look for a more objective source of information – books, relevant web sites and financial papers. Even then, you should take every bit of information with a grain of salt, as information tends to spread from the inner circle to the outer one, and till the time a good news about a specific firm reaches the financial paper, all those involved might have already sold it in quite a high price..
• Do not show off after a couple of months
Gain or loss in the stock market should be measured in years, not months. The fact that the stock gained 10% a month, and even 50% a month, should not particularly surprising. It’s not a rare event. Every month there are dozens of stocks that make up or down moves of 50%. This is the dynamic nature of the market changes all the time. We guess you want be too happy to show and tell when your stocks will fall at the same rate they have went up.
• Do not forget that time is your friend and enthusiasm is your enemy
To earn in the stock markets requires patience and an iron will. Patience and determination are traits that many investors do not carry with them. Most people want to see quick results. This is why markets are so volatile – it happens that human nature is volatile.
Once investors are excited about the market and raise it to new heights, and another time they sink into depression and allow prices to fall sharply. Use the fear in the markets to buy and not sell.

• Never stop learning
By investing in the capital markets you can learn about the economics of their countries, the nature of the industries, the nature of people. The market connects various scientific disciplines: economics sociology, anthropology, psychology, mathematics, statistics, physics, medicine, biology and even philosophy.
Learning does not end in areas mentioned – the investor that was exposed to the capital market also learns a lot about himself, his character, his qualities and weaknesses. Only through constant learning one can improve his investment and increase the average yield over time.
• Do not be afraid (too much)
Healthy fear can improve the quality of your investment over time, but who just afraid all the time, could never invest in stocks. It’s okay. Not everyone is cut out for it. There are enough financial assets with high security level that can accommodate people with a low fear threshold. These will have to accept the fact that even the average yield which will be received will be lower over time.