The term Share strategies in Google brings about 70,900,000 results, with such large number of links, its little wonder that a person looking for help to develop their share strategies can easily get overwhelmed. In this section you’ll find some nice tips on the best known share strategies, most with proven track record in both short and longer term periods with above average results.

That said, it should be emphasized that no single stock market strategy can always be successful.  If there was one, perhaps everybody would adopt it leading to share price fluctuation that undermines the original strategy. The commonest strategy so far is the recognition of undervalued shares. Below are more shares strategies to consider;

Dollar cost averaging

Due to the difficulty involved in getting correct timing decisions when transacting in the stock market, some authorities back the dollar-cost averaging, this share strategy involves the purchasing of a fixed sum of stocks at regular intervals, done without regard to the performance of the stock market.

Cut loses Policy

This strategy advices that if a share value falls after purchasing, you should liquidate it. Meaning you cut losses immediately the share price drops to a predetermined level - say 15 per cent. This method also referred to as “Stop-loss policy” warrants that you don’t loose more than 15 per cent of your account equity.

Contrary opinion

It’s popularly stated, especially in the stock market that when everybody agrees with a certain course of action, follow the contradictory opinion, the funny thing about this strategy is that the stock market analysts seldom agree on anything.

Liquidate Underperformers

Some market pundits recommend the liquidation of underperforming stocks, thus stocks performing below the market average should be sold and the money used to purchase well performing stocks.

Success breeds success

This very old strategy otherwise known as “The reversal system” advises that in any given four weeks period, a share should be purchased when it’s price rises above it’s previous high price and liquidated when it drops below its previous low prices. This share strategy has been empirically tested and reported to deliver very good results.

Love life, not just the weekends. You only have one life, Live It! @ www.NicciAndLee.com

Share trading presents a very unique opportunity to make money within a short timeframe. Making money from shares requires that a trader keeps in mind the following essential points.

1.    Research on the target company.
You’re advised to thoroughly research the company you intend to purchase shares from. Research should be done some time before you purchase the shares. Your background research should be founded on factors such as the target company reputation, market capitalization, Market share, and financial results. This information can be easily obtained from the company audited financial results either straight from their website or from financial magazines and newspapers.

2.    External factors that may directly affect the share price.
Making money from shares involves keenness in identifying those factors that have a direct effect on the share price of your target company(s). Share prices are usually depended on a number of external factors and which cause prices to fluctuate on a daily basis. These factors play a huge role is determining the demand for particular shares. External factors like political instability, financial results, scams, and more, can have a big influence in share prices thus warrant attention when investing in shares. Company mergers, management change and acquisitions are also factors to be closely observed.

3.    Timely decisions.
Making the right decisions at the right time is the secret to success in the stock market. Avoid impulse trading and instead focus on objective trading based on empirical data obtained from your research of the market. Impulsive trading could adversely affect your success as a share trader. Impulsive trading always results to losses. Be patient until the time is right to purchase the share at a price you deem appropriate.

4.    Learn the risks.
Shares like any other form of investment presents some risks that any serious trader has to be aware of. Risks associated with share trading are especially high in appreciated markets. Most shares maybe overvalued, hence a decision to purchase shares of a particular company should involve comprehensive study of the said company’s background.  Some of the things worth study are the company’s future plans, products potential etc.

Love life, not just the weekends. You only have one life, Live It! @ www.NicciAndLee.com

The cost of trading is one aspect of investing that investors complain the loudest about. Whenever a person decides to go to the market to either purchase or sell securities - which could be stocks or debentures, they will most likely suffer certain costs like stamp duty or brokerage fees.

These are referred to by economists as transaction costs or trading costs. Such costs are the equivalent of tax to trading, whenever you decide to trade and whether you earn a profit or make a loss; you have to have to pay these costs. In case you have a bullish outlook that the price of a certain stock is going to rise, then you suffer double costs namely: entry costs and exit costs. For trading to be lucrative, then your forecasted price differential has to be larger than this roundtrip transaction costs.

The following are five parts of a transaction costs.

a)    First is the commission paid to the broker.
b)    The second is the “spread” in the case of currency trading.
c)    The third is the counterparty risk. This can happen at the broker level or in rare cases where the entire exchange fails in a payment crisis.
d)    Fourth is the administrative cost involved in transfer form signing, courier and more.
e)     Lastly, the risk of scam, stolen or forged certificates.

Counterparty risks are usually the hardest to quantify in the basket of trading costs. As of 2009, the other costs of trading have summed up to nearly 6%. In speculative investments like FOREX, if you estimated a price to go up, then it would have to climb up by at least 10 per cent for your trade to be deemed profitable.

Trading costs have dropped sharply and counterparty risks have been eliminated in the NSE, this is because trading agencies are required by law to give investors guarantee on every trade, this means that incase a counterparty to a trade fails or defaults, then the clearing firm has to step in and honor his obligations.

Brokerage fees and spreads have also dropped significantly; the only problem that needs more attention is that of forged certificates which has actually doubled.  With better market efficiency, more people will be attracted to investing; hence increase the country growth, the ultimate reason why reducing transactions costs is a matter of high importance.

Love life, not just the weekends. You only have one life, Live It! @ www.NicciAndLee.com