Tips for Investment In Stocks Part.I

Here are some important principles to be followed while invest in share market. Applying these principles has the effect to win every time but to reduce its exposure to changing markets. They are not exhaustive but represent a good start to understand the philosophy of financial investments. Knowing the aversion to risk is very important in stock trading. What is risk aversion?

Risk aversion is the level of risk you're willing to accept. A strong aversion to risk means that you bear little risk, and conversely a low aversion to risk implies that you're willing to take risks.
Risk aversion can be classified into three categories:

* Low
* Average
* Strong

Once its aversion to risk assessment, it is possible to choose its investment products. It is important to realize that the returns are commensurate with risks: the higher the risk, the greater the gain / loss potential can be significant.

Some products are to be avoided or privileged following its aversion to risk, here are the 3 main families of products that can be used:

* Shares

Shares are products with high volatility, it is best to choose this mode of investment strategies with low risk aversion. It is possible to make a lot quickly, but also losing a lot.

* Bonds

The Bonds are to be considered in strategies to moderate or high risk aversion (this will depend on the strength of the underlying). These products allow recovery of interest at intervals over a set period of time. The risk of these investments is the cessation of payment of the underlying (state, company ...).