http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv Basics of Successful Investing IV Basics of Successful Investing IV is the last in our series. We wrote about getting your financial house in order and making some basic decisions about why you are investing and how much money you are willing to put at risk in Basics of Successful Investing I. Our advice in Basics of Successful Investing II was that you should start out by investing in what you know. And, when you pick something else you need to do your homework and thoroughly understand what a company does to make money and how it will manage to keep doing so. And we looked at the concept of intrinsic value as a guide for when to buy stocks, when to sell and when to avoid them. In Basics of Successful Investing III we wrote about developing and refining the skill set necessary for making sound and profitable investments. And we wrote about limiting the number of investments so that you can practically manage your portfolio in the midst of a busy life. If you do all of these things will you make money investing in the stock market? Here are some practical thoughts on that subject. A Practical Approach to Investing Keep the basics in mind whenever you consider a new investment or whether to keep a current investment. And keep in mind that investment opportunities come and they go. A sad fact about the stock market is that way too many investors wait way too long to get into the market during a rally. This is coupled with the equally sad fact that way too many investors jump into a rally in its final stages and just in time for a major correction or market crash. Then they take their money out just at the bottom and swear off investing in stocks ever again. There are two practical points to be made in this regard. If the market is starting to go up and you are not sure, invest a little. Follow our suggestions about picking stocks that you know, understanding how these folks make money and what their margin or safety is when the market turns around. Beginning investors can put a few hundred dollars into a couple of stocks and start learning how to wisely pick and follow investments. And the other point is that the so-called blood in the streets analogy is true. The best time to invest is when the market or a given stock appears to be at its worst and everyone else is bailing out and driving prices down. Here is a practical example. Xerox Xerox invented desktop printing. For a long time every office printer was referred to as a Xerox. Xerox was a verb: Xerox this please. Then in the late 1970s two things happened. Xerox had so much money that it started buying insurance companies. Hurricane Hugo hit the Gulf of Mexico and Xerox lost billions of dollars in insurance claims. The other thing was that Japanese, South Korean and Taiwanese companies were making printers, shipping them to the USA and selling them for less that it cost Xerox to produce them.

1. Basics of Successful
Investing IV
By: www.ProfitableInvestingTips.com

2. Basics of Successful Investing
IV is the last in our series.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

3. We wrote about getting your
financial house in order and
making some basic decisions
about why you are investing
and how much money you
are willing to put at risk
in Basics of Successful
Investing I.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

4. Before We Continue…
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5. Our advice in Basics of
Successful Investing
II was that you should start
out by investing in what you
know.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

6. And, when you pick
something else you need to
do your homework and
thoroughly understand what
a company does to make
money and how it will
manage to keep doing so.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

7. And we looked at the concept
of intrinsic value as a guide
for when to buy stocks, when
to sell and when to avoid
them.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

8. In Basics of Successful
Investing III we wrote
about developing and refining
the skill set necessary for
making sound and profitable
investments.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

9. And we wrote about limiting
the number of investments
so that you can practically
manage your portfolio in the
midst of a busy life.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

10. If you do all of these things
will you make money
investing in the stock
market? Here are some
practical thoughts on that
subject.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

11. A Practical Approach to
Investing
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

12. Keep the basics in mind
whenever you consider a new
investment or whether to
keep a current investment.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

13. And keep in mind that
investment opportunities
come and they go.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

14. A sad fact about the stock
market is that way too many
investors wait way too long
to get into the market during
a rally.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

15. This is coupled with the
equally sad fact that way too
many investors jump into a
rally in its final stages and
just in time for a major
correction or market crash.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

16. Then they take their money
out just at the bottom and
swear off investing in stocks
ever again.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

17. There are two practical points
to be made in this regard. If
the market is starting to go
up and you are not sure,
invest a little.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

18. Follow our suggestions about
picking stocks that you know,
understanding how these
folks make money and what
their margin or safety is
when the market turns
around.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

19. Beginning investors can put a
few hundred dollars into a
couple of stocks and start
learning how to wisely pick
and follow investments.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

20. And the other point is that
the so-called blood in the
streets analogy is true.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

21. The best time to invest is
when the market or a given
stock appears to be at its
worst and everyone else is
bailing out and driving prices
down. Here is a practical
example.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

22. Xerox
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

23. Xerox invented desktop
printing. For a long time
every office printer was
referred to as a Xerox.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

24. Xerox was a verb: Xerox this
please. Then in the late
1970s two things happened.
Xerox had so much money
that it started buying
insurance companies.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

25. Hurricane Hugo hit the Gulf
of Mexico and Xerox lost
billions of dollars in insurance
claims.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

26. The other thing was that
Japanese, South Korean and
Taiwanese companies were
making printers, shipping
them to the USA and selling
them for less that it cost
Xerox to produce them.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

27. The company changed
management and started to
set things straight.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

28. They wrote off losses from
the insurance fiasco and
substantially reduced
production costs and
improved their printers.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

29. They were making good
money in the mid 1980s but
their profits were diluted by
the write-offs for the
hurricane losses.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

30. At this time a group of
investors started a takeover
bid. They saw the value of
the company although many
investors did not.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

31. Along the way while the stock
was trading at $60 a share
and the investors got caught
short on a margin call and
had to liquidate most of their
holdings.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

32. The stock fell to $30 a share
in a couple of hours. Here is
where the basics of
successful investing come in.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

33. Anyone who read the Xerox
financials and understood
their story knew that here
was a $60 stock selling for
$30.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

34. By the next day smart
investors had purchased the
discounted stock until the
price was back up to $60.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

35. This sort of story is repeated
again and again in individual
stocks and the market as a
whole.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv

36. Those who follow the basics
of successful investing make
money again and again.
By: http://www.profitableinvestingtips.com/investing/basics-of-successful-investing-iv