Bucharest Stock Exchange is facing gloomy times dented by evolution of international equity markets. Gabriel Aldea, former investor, at present, broker at Intercapital Invest explains what are the steps to take in investing at stock exchange and how should current investors react to trading’s meltdown.
Broker at Intercapital thinks this is the best moment to take the first steps at the stock market, which usually should consist in getting as much information as possible, the understanding of its functioning mechanisms, selection of information channels, and carrying virtual trading in the end.
A person who decides to enter the market in the upcoming period has two big advantages compared to an investor who started activity at the stock exchange three years ago.
First of all he/she is aware of the risks. A simple calculation will show him/her that if he/she had bought stocks earlier this year he would have registered major losses. Risk awareness is a core element of a successful investment because this way the investor is ready to cope with a loss, being able to make rational decisions, influenced at a lower extent by emotional factor.
An investor who started to invest few years ago had not been aware of all the market’s risks, even if the broker did his job to warn him/her, because analyzing stock evolution in the past few years he would see the positive trend of the market.
Second of all, the investor who takes his first steps at the stock exchange, may benefit of major outturns, said the former investor, if we take into consideration that many shares will have attractive prices at the end of the decline period.
A basic rule of stock exchange evolution is that of periodicity. Evolution of a stock cannot be constantly upward, or downward, but on the contrary, the growth intervals are followed by declines.
“If we take