Its Stocks, Not Markets, that Bring Investment Success by Gabriel Nijmeh

If you are fairly new to investing and looking for some guidance or if you are seasoned investor, let me introduce you to NAIC.

National Association of Investors Corporation (NAIC) is a non- profit, tax exempt organization whose membership consists of investment clubs and individual investors. Founded in 1951, the mission of NAIC is to provide investment education, information and support. They prescribe to four basic, yet timeless investment principles:

1. Invest regularly, regardless of the present outlook for the economy or stock market.
2. Reinvest all earnings, letting the power of compounding work for you.
3. Discover growing companies so that your wealth can grow as their sales and earnings grow over the years. 4. Diversify your holdings, and don’t put all your eggs in one basket, regardless of how carefully you watch that basket.

The late George A. Nicholson, Jr. CFA - father of the modern-day investment club movement, gave these principles to a good friend in 1939 and told him that if he followed them he would make the money he needed to start his own business.

“I never thought these principles would be so aggressive,” Nicholson once told Better Investing editors. “They were meant to be defensive, to protect investors from losing money. They turned out to be quite offensive, too.” He enjoyed comparing this approach to investing with his college football experiences. “The best offense is a strong defense.”

I can attest from own experience of such a disciplined investment program. For the most part, I have invested exclusively in mutual funds because I never had the time or experience to properly research and analyze individual stocks. One day as I was reading through the business section of my local newspaper, I came across an organization called the Canadian Shareowner Association (CSA) which piqued my interest. I started researching it a little more and as a result of my research stumbled on NAIC’s web-site, which then lead me to learn about Warren Buffet and his style of disciplined investing. The Canadian Shareowner Association follows a lot of the investment principles of the American based NAIC.

Membership to CSA is inexpensive and the educational materials are very informative and drive home the above noted investment principles. For only $79 a year, I decided to join the CSA which includes a bimonthly magazine with two company stock studies, market outlook, financial planning and more. In addition, I have access to the low cost investing program where I have set-up my investment plan. The great thing about such a program is that you can buy shares in any dollar amount from such companies as Johnson and Johnson, Microsoft, Pfizer, Wal-Mart. Your money is pooled with other investors and trades are executed during specified trading windows. For example, if you invested $50 in a stock that is trading at $30, you will own 1.67 shares. Another great feature is that dividends are automatically reinvested allowing for compounded growth.

Whether you join an investment club or are a self-directed investor, you work at your own pace. Learning how to analyze companies using the stock selection guide which is a tool that was created over fifty years ago and is organized in five sections. The section guidelines will help you determine if the company would be a good investment by:

1. Evaluating historical sales and profit growth and estimate future growth
2. Analyzing historical management performance 3. Analyzing historical profit and price data 4. Evaluating risk and reward and; 5. Determining the potential return on an investment.

The software is easy to use and you can download company profiles with historical information thus saving you data entry effort. As company financials are released quarterly and yearly, you just enter the information and keep an eye on performance.

For more information, you can check our http://www.better-investing.com or http://www.shareowner.com to find out more information.

Finally, if you want to be a successful investor keep in mind the following:

1) A focus on the long term. 2) A discipline to apply in building and managing a portfolio. 3) Patience to persevere.

Bear or bull markets, a sound, disciplined investment strategy will bring you investment success over the long-term.

Gabriel is the editor and webmaster of The Money Advisor - http://www.the-money-advisor.com. He believes that everyone is capable of controlling their financial destiny with the right combination of rich thinking and smart action. The Money Advisor, a knowledge network of people, articles, tips, e-books and ideas about making money, saving money and building wealth!

Penny Stocks can be a very effective way to provide you with a secondary income. They can be used to create passive income because they do not require you to be constantly watching over them. The problem that most people have when it comes to stocks is - not knowing the right time to sell.

Penny Stocks can rise very quickly but they can also fall quickly too. The reason that most investors hold onto a stock is because the fail to separate their emotions from their actions.

All of your penny stocks buying and selling should, of course, be based on sound research both of the market and the companies? recent history. How the company is doing in terms of profitability, whether they are just about to, or have just announced profits, losses or new patents, discoveries and products, can all affect your decision on whether, or not, to buy.

Knowing the right time to sell your penny stocks however can sometimes seem, as much an art as a science, although getting it wrong can be fatal. Many people seem to put all their research efforts into knowing what penny stocks to buy and when to buy them.

Investors seem to forget about researching to sell stocks. Instead, they let their emotions take control and sell at the wrong time. Investors selling at the ?wrong time? fall into two categories. These categories are, The Runners and The Sitters.

The Runners like to take profit way too early. They see their Penny Stocks rise a little and sell because they don?t want to ?risk too much?. I?ve seen it time and time again; these people set out to earn a 25% Return on Investment and end up taking profit at 1%. Someone who takes profit twice at 25% earns a lot more than someone who takes profit twice at 1%. Usually, as soon as they sell a penny stock, it will rise even further and they?ll be wondering why they sold so early.

The Sitters are the heavily emotionally involved in their penny stocks. They are gamblers at heart and just do not want to let go of a losing position because ?it could bounce back any day now?. When they do let go of their Penny Stocks - there is virtually nothing left. The sitters like to sit on a losing position. They like buying but dislike selling.

Do you want to be a Runner or a Sitter? Well, I hope you are neither. You want to be a winner. A winner will separate their emotions from their investment thinking and will also research when buying and also when selling. They will buy and they are not afraid of selling.

There is great deal of profit to be made from trading in Penny Stocks. But you have to know not only what to buy but also how long to keep it and when the best time to sell. The answer, as with most things in the world of finance, is good information and research. But that doesn?t end when you buy. Find out why your penny stocks are rising and this will put you in a much better position to know when to sell.

About the Author: This article was written by Sam Chim. Please click on the link for more Penny Stock Advice