Quote (madeinchinars @ Jul 18 2013 09:44pm)
read and learn
you're not going to be an expert in a few months, traders try to do this for a living
as for trading as an ordinary citizen, you'll going to be interested in long-term value investing. so learn your fundamental analysis.
read the news every day, on sites like the economist. spend a half-hour or so every day. in a year or so, you'll be pretty good at knowing what an article says without even reading it
do not skimp or make decision-making choices based solely on a brief analysis. just because your dcf is telling you to buy doesnt mean it may be smart to buy. remember you need to take account into the entire economy and environment. maybe its underpriced because the income statement looks like shit etc.
as for technical analysis, trading rules are pretty much blackboxes, so unless you really think you can beat the thousands of algorithms out there as a normal investor you're not going to be interested in this.
lastly, I suggest you really set up a diversified portfolio. For example, the FF 3-factor model describes 95% of all stock movements and controlling your risk is very important. This allows you to trace the index behavior with a lower or higher risk as you desire. Modern portfolio theory and its extensions (ie. financial optimization) is a pretty important tool in understanding how things like ETFs work, which tbh is probably a better way of investing for a newbie.
A good way to learn about finance is to just read investopedia. I read that for about 10-15 minutes a day no matter what.
Thank you.
