Real Money: Sane Investing In an Insane World

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Cramer’s investment rules
Investing in shares is addictive. When the prices of shares moves up, investors buys more shares and still when the prices goes down and investors incurs losses, they will still wait for the stocks to go up and buy more shares. In the real sense, there can be the assumption that the losses will discourage the investors from investing in stocks but it is not true.
Jim Cramer advises on allocating a small portion of one’s assets to speculation (Cramer 4). Every investor aspires for the biggest investing company to get higher outcome and this may be risky hence Cramer describes how an individual should allocate investment portfolio to be able to take these risks. He goes further and explains that if an investor can’t speculate on the stock market, which should give off portfolio to a common fund. He compares investing to gambling. He further recommends that one should do a comparison of the stock market prices, know when to trade the shares and also how to know the market ups and downs (Cramer 16).
Cramer analyzed some rules of investments in his book which a person who wants to invest should follow. Investment in stocks can be rewarding or risky at times, therefore an investor should have investment rules to avoid stress. A person should avoid unfamiliar companies or companies which are unstable (Cramer 18). Risk is unavoidable in every stock investment hence should decide the amount of money a person is willing to part with before starting to invest. It is not fair to assume a risk that an investor is unable to handle financially. In addition, such a person should not rely too much on brokers but should try to research on companies to invest.
I strongly agree with Cramer’s rule of not buying all shares at once. Putting all your money at once in buying shares may be a bit disappointing if the company collapses. An individual should start with a few shares and increase the number as you learn more about the company. Sources states that an individual should diversify and not put all money in stock and this protects an investor from incurring a big loss. Beginners’ usually make a mistake of buying many shares at once (Cramer 65). A person should take time to learn about a company and how the shares are traded and also the dividends they attract before investing too much. An investor should also ensure that h/she is well conversant with the terms and conditions of the investment company.
Buying all shares at once minimizes profits and als...