Comfort Zone Investing: Five Questions to Ask Yourself About Investing

Filed under: Comfort Zone Investing

1. Can I afford to lose money I put into stocks?



The number one question to ask because in these troubled times (see GM) any company can go out of business at any moment. And there is no comfort in bigness (see GM). Investing in stocks is risky (see GM). If you can't afford to lose money you invest, then don't invest. It's better to save that money until you have enough to be able to invest with some of it so that the loss of the funds, or a partial loss, won't affect your lifestyle.



2. Have I done enough research on a stock to buy it?



Most investors will research a stock by looking at a few data points, then pull the trigger. Or they'll hear a recommendation from a screaming head on television and decide, because of the emphasis of the recommendation, that it must be the right stock to own, regardless of its risk profile. One time, at least once, but this one is well documented, a talking head on a financial show was recommending a stock at the same time his fund was selling it. He lost his job.

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Comfort Zone Investing: Five Questions to Ask Yourself About Investing originally appeared on BloggingStocks on Sat, 17 Jul 2010 10:30:00 EST. Please see our terms for use of feeds.

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