Stock Market Guide

No matter who's website you go to to get investing tips in the stock market, 99% of them will tell you that you need to be in the middle of it all and trade stocks. That's great (if they know what they're talking about), however it's rare to find one that will tell you to sit out of the market. Jim Cramer for CNBC's Mad Money has never said to sit on the sidelines while the crap hits the fan. WHY? because if you're sitting on the side not trading, you don't need to watch his show every night.

In my opinion, there are times to sit out on the daily trading going on on Wall Street. Here is a list of 5 signs to look out for to know when it time to sit out on the trading action.

1. It's great when you see the stocks you're investing in climb in value, but if a stock(s) move too rapidly and too much, it's time to sell and sit back to wait for the pull-back from other investors taking profits. The old buy and hold tactic doesn't work in this market any more.

2. Every three months publicly traded companies release their earnings reports to inform it's investors of the current condition is from the results of the previous three months. When you see you company coming out with two bad report in a row it's time to sell and wait for when the company is back on it's feet. Usually after the company has shown three good quarterly reports in a row.

3. When the federal government has to step in to help a company out because of one reason or another it not a good thing no matter what the main stream media tells you. If the company needed help from the government to me it tells me that the CEO and the rest of the board haven't done the right thing and most likely will do it again.

4. When you notice the economic signs (ie: jobs report, housing report) that the country is in a recession. it's a pretty good sign to sit out for awhile. Yes there are stocks that do well in trouble times, but unless you're going to spend more time than usual doing research, it may be better to sit out and enjoy other things in you life.

5. When you see the federal government trying to control more things within the private sector it's time to take a vacation from trading stocks. Whenever Washington has ever tried to control anything, they've screwed things up. Look at the Board of Education and the Board of Energy. Two agencies that have never been productive and has wasted billions of dollars. Better yet. look at Fannie May and Freddie Mac, they have been in the toilet for years now and they've been controlled by the federal government.

It's great to trade stocks, but you also have to be disciplined enough to know that there will be times to not trade stocks and go out and spend the money you have made in the stock market.

Who in this world couldn't benefit from some advice? No matter what the subject is, we can all use a little help in life and when it comes to investing in the stock market, the beginner investing in the stock market will need all the help it can get. The problem is that many beginners are not sure where to go to get the information they need to succeed on Wall Street.

As a beginner, you need to read or listen to as much as you can about investing. Just be aware to not overload your brain with too much information at once because you will confuse yourself before you even get started and you will do one of two things. One, you will lose a huge chunk of you portfolio. Two, you will get fed up with all the information and just not even get involved. Either way you will not help your future. Take your time and absorb the information at a reasonable pace which is comfortable for you. Each of us learn differently and at different paces, so work at your pace and not someone else.

Another problem that beginners have is that there are too many bloggers out there trying to make a living. Many of them are stock market websites. Some (if not many) are average Joes when it come to investing in the stock market. I've found many sites that offer to help you understand the stock market at a small subscription fee. They will send you daily e-mails on what stocks they think are going to move with very little information as to why they think it's going to move. As an investor, you need to research all stocks before you invest one penny of you money into the company. I've heard of too many people falling prey to these types of websites and losing a great deal of money in the process.

You also need to stay away from the penny stock websites until you've learn all the basics to investing. There are hundreds of these sites out there that will make claims of making big money. Don't get me wrong, there are some sites that are legitimate but only a few. Unless you understand the intricacies of playing penny stocks you will lose 90% of the time.

If you are one of the thousands of new investors who are trying to make big money, you need to take your time to learn what you need to to be successful. Most of all not to trust anyone's "advice" without looking into the company yourself. Of course you need to know how to properly research a company first. These are the types of things you need to learn.