by Marie Claire
When looking for good companies to invest in, following the crowd can sometimes work for a few weeks or possibly even months, but this is a good way to get burned. Listening to the "experts" does not equal research.
No matter how knowledgeable these people may sound, you can get just as good a prediction from a psychic by calling one of those 900 numbers. A stock market expert’s predictions are nothing more than a simple guess, and your guess is as good as theirs. With stockbrokers often rewarded for activity, not successful investments, it's critically important to make sure you believe that what you're doing is right. Chasing others' opinions may seem logical.
To avoid the crowd mind-set, he said simply follow these three most important lessons:
1. Buy stocks with a margin of safety.
2. A stock is part of a business.
3. The market is there to serve you, not instruct you.
The first lesson usually makes the headlines. It means that you should buy stocks for less than they're worth. Learn to leverage your own abilities and you can live the life you dream.
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