Outside Looking In
Some readers emailed me privately wanting to know about stocks and financial statements. Here is my two cents worth.
On Stocks
I remember two things that my financial planner made me do so I will not be overwhelmed by stocks (well) and so that I can understand it:
1. He asked me to look at the business page of the newspaper everyday, the Stock Exchange page to be specific, and to choose at least 10 stocks that I will track and follow day after day after day.
He was right. This gave me more than what I thought it will give me. At the beginning, yes, there was confusion, and then after some time (six months… and going), illumination. I had a “feel” of the market, and somehow, my “gut” was developed. I would know if stocks are on the rise, or if it is on freefall, which is the time to buy. The green and the red arrows in the newspaper actually meant something, but only as supplements to the general, wonderful, engaging world of numbers. And when I recently had a report on my stockholdings and saw a 5% growth rate per month, I knew why a lot of other people play this game, and why they become greedy.
