Hello chandon1998

chandon1998 here. There are literally over 150 messages posted on the stock boards everyday from players that are new to the stock market, need advice, or just want a few tips on making the best portfolio possible. This project started as just a thread on the Stock Tips board to help those players out. I've decided to move that advice to my pet page so that long after that thread has died, players can still come to get helpful stock advice.

I'll take you through some common mistakes, things you can do and avoid doing to maximize your portfolio.  I'll also go through some of the most frequently asked questions I get from new investors.

The most important thing you can remember before you start investing is patience.

People come in all the time with the mistaken idea that the stock market is a "get rich fast" scheme. That's simply not the case. You have to be willing to dedicate alot of time to the stock market to make it work for you. While it is possible to hit a lucky investment and have a stock you've invested in go up quickly, 99.9% of the time this isn't going to happen. You will not be rich a week from now, or even a month from now. The stock market is unpredictable, and will likely do the opposite of what you want for long periods of time before skyrocketing. If you can't afford to let a fairly large amount of neopoints sit for long periods of time, then this is probably not the place for you. In order to be truly successful at the stock market, you have to be willing to be patient. If you are, you will find this to be one of the most rewarding and lucrative areas of Neopets with very little maintenance required.

Tip #1:

Buy low sell high. This is the most basic and well known advice in the market, and yet people are constantly buying at higher prices hoping to see a jump. The higher the price, the longer you will wait before a return.  I always recommend new investors to stay within a 15-18 buy range for their stocks. You will likely have a lower threshold on your sell range and will want to wait for shorter periods of time before selling and this will allow you to maximize your profits in a shorter period of time. As your portfolio progresses and your neopoints become more ample, you will have the ability to branch out from this buy range in order to stabilize your portfolio. By that time however you likely won't need tips from me. :)

Tip #2:

What goes up must come down, and vice versa or at least most of the time. Never sell a stock for less then what you paid for it. Outside of a very very few instances over the last 4 years where a stock has gone bankrupt...the stocks will rise again. The stock market is unpredictable and there are times when you can lose your investment to bankruptcy. This is just an unavoidable fact of trading in the market. It's not often however that we see a stock go bust, so you're better off just not worrying about it for now. Fear of stocks going bankrupt have led many people to sell at a loss and regret it later. Don't be one of those people. Always hold on to your stocks and sell them at a profit.

Tip #3:

To make money you need money. You can't expect to make any kind of decent profit if you come into this broke. You want at a minimum of 100K to get into the stock market, and I personally recommend 450K so you can run an entire month without needing to sell. If you have less then that, you need to focus on making 15K NP everyday in other areas (games, restock) to keep your port going. You want your portfolio to grow everyday, so you're going to need the capital to do it.  

Tip #4:

Buy the max. Everyday you should focus on buying your daily limit of 1000 shares of stocks. At a minimum you should buy 500 shares, but you will be limiting your growth. Always focus on buying the maximum amount of shares per day. If you can't afford to buy 1000 shares look at either selling off a stock to make up those neopoints or hit up a few games and get it.  

Tip #5:

Use common sense. People are always posting up "Buy this stock so it will go up!" I'm sorry to say it's simply not true. The stocks are completely unpredictable, they have to be in order to keep from being abused. If a stock could be pushed up by purchasing more shares, entire guilds would have single stocks through the roof. It doesn't work that way. Always use common sense when reading advice and research it. Players have wasted small fortunes of neopoints on bad advice they've kicked themselves for later.

Tip #6:

Do the research! Head to google punch in Neodaq, hit "I'm Feeling Lucky" and do your homework. You will find information about how often a stock peaks, how often it goes on runs, graphs, reportcards, and an active community and forum that is focused on reaping profits from the stock market. Next to your own common sense, it's the second most useful tool you'll find for investing.

Tip #7:

Ignore Nigel! He's not your best friend, he's not going to help you out, and his advice is not useful. I've seen people make all of their purchasing decisions based on what that little toon tells you and it is a good way to take a head dive in the market. Trust your own research, on the stocks that are within your buy range. We all love Nigel, we just don't let him make our stock picks for us.

Tip #8:

Rumors will get you in trouble Everytime a glitch occurs people go into panic mode and make mistakes. When a rumor mill is started about a stock crashing, the whole market going under, the world coming to an end, the government charging your for e-mail, getting paid for sending chain messages, clicking links for free paintbrushes, etc. Ignore them all. You'll be glad you did later.

Tip #9:

Don't get discouraged. Again this is a marathon not a sprint. Your stocks will likely fall, your port will go into the red, and you will feel discouraged at times. The important thing to remember is that if you keep pace you will come out ahead. It may be a month, it may be 6 months but before long you will develop a profitable port that takes only 5 minutes a day to upkeep.

Tip #10:

Diversify! Diversity doesn't affect a brand new player nearly as much as a longer term player but it's something that should be taught early on so investors can get in the habit. Concentrating too much on any single stock could leave you financially void for months. Try to build your portfolio up with your stocks spread out as much as possible. The chances that a single stock will skyrocket is far far less then one of 40 stocks skyrocketing. If you diversify then no matter what the stock market looks like you will always have a few stocks that are doing well and making you money.