In a bull market, it is not difficult to generate wealth from investing in stocks and shares. The general trend is up and you can benefit from this.

Trading now is easy - open an online account and the total cost of the buy and sell is small if not negligible.

It is worth noting this: the low cost of the buy and sell means that it is pretty possible to supplement your income by a few hundred or thousand dollars a month. Of course we know that people make millions in the markets, but they also have to risk millions. Take Warren Buffet, his profit from the dollar decline may be making him billions, but it cost him a billion to make the bet.

I'm pretty risk averse and I like to calculate my earnings in hard cash at the end of each month. So it is not unusual for me to cash out everything after only a month and start again, even if the stocks are doing well and I lose out a little in the transaction charges. This approach has many other important benefits, including:

a) it keeps me unemotional. The stock (they call it a share in England) is just an entity that I trade and each month i'll risk my money on that or any stock that may give me the best return.

b) I don't fall into the trap of leaving my money somewhere where I'll forget about it and hope that one day it'll be worth much more.

c) I get used to the process and always have my eyes on the market. I get to know how strong or weak my stocks are at any point in time. In other Words, I'm keeping an eye on my money.

I've started a newsletter to share my experiences: www.wanttosaysomething.com

15th May 2006

Shares crashed today. Apparently due to a predicted rise in interest rates, but also the weakening dollar and the unknowns of the Iran situation. This just goes to show the benefit of diversifying, but also the fact that no one knows anything.

Normally the strategy is to attempt to make your capital appreciate quickly, which inevitable means investing in higher risk stocks. But on days like this, it is the "blue chips", [which grow incredibly slowly] that retain most value.

Still, days like today are a good time to buy. Problem is knowing where the bottom is. Do I risk buying today when they could fall again tomorrow. Best strategy is to wait and see what happens tomorrow. If I see red, I'll wait. If I see green...well you know what that means.

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