Posted on August 25, 2009 - by Alvin

3 questions to ask yourself before investing in stocks

Photo by -bast-

Peter Lynch wants everyone to look inside themselves first before investing in any stocks. He came out with 3 important questions that will evaluate whether your situation is suitable for investing (from his book, “One Up On Wall Street“). I find it very apt to share with you, especially if you are intending to play stocks the very first time. These 3 questions are the very first few questions you have to ask yourself. Sadly, many people’s first question to ask is “what stock to buy?”. In fact, you should NEVER NEVER ask this question.

Question 1: Do I own a house?

The first question to ask is “Do I own a house?” The reason Peter gave was that “99 cases out of 100, a house is a money-maker”. He is pretty sure that a house is the very first investment everyone should make because of the high degree of certainty that the investment will make money for almost everyone. He explained and substantiated his stance why most people are more suitable for investing in real estate than stocks: Read more…

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