When most people are asked what are they doing in the stock markets? Most of them do not really know how to answer that questions. Checking with just friends around me, I knew that not many really understood what they are doing.

Their answers normally surrounds the following basic answers such as:
I am investing in stock market, or I am trading the stocks. I am a long term investors. The sad parts is most people do not really make money in the market. And normally their excuse is I buy the stock for a long term. when they start making a little money, they are always in the hurry to sell. Sometimes they may not even know the real meaning of investment.

Investment to a Business people and to a Working people may means different things as well. Maybe I will try to summarise a little bit here what I have learnt from my own experience in making money from the stock market or even from my other investment.

These basics for me is very important because only when I decided to follow them then only I started to see results in my own investment.

1. Investment is not about making money, But it is about preserving the value of your money. The rest is Bonus. Warren Buffet never invest in something that he is not familiar, that is why Warren Buffet follow very closely these rules in investing:

Rule No 1: Never Lose Money,

Rule No 2: Follow Rule No 1 Strictly

When you know the risk in one investment, then only you are able to manage it well and make it grow.

2. Knowing when to exit even before entering into any investment. If it is for a long term then let it be long term, you must be able to stomach the up and down of the stock value. If it is entered for only one month then keep that terms strictly. Most people change their exit everytime the market moves. If the market moves in their direction than they will take profit prematurely, when the stock goes into the opposite direction of their trade, they normally stay too long and expose themselves into greater losses.

3. Investing requires great amount of patience. There are times that I lost patient in watching the market moves, so I enter into the trade too early and exit too late. or it can be the other way as well, entering too late and exiting too early. There are time the money are better save as cash sitting in the bank rather place in any investment.

4. Knowing yourself and knowing your own limits. A lot of people do not know the condition of their own mental health. When you are not feeling well, or when you have very bad day, then put off trying to invest your money in anything. Learn more about the investment that you are going to undertake and do not ever take it too lightly.

Well, understanding where you stand in your investment profile will help you to reduce a lot of heartache due to losses. knowing whether you are better as trader or long time investors and knowing the difference will take you further in your investment life.

Knowledge reduces risk, get knowledgeable and you will be able to manage your investment risk well.