ether the stock is on an upward or downward trend. Another common strategy is known as short selling. This involves borrowing a stock from a broker at a given price and selling it, in hopes that the stock price will drop from the original price. Once this has occurred one can buy it cheaper and keep the difference. Also a very important strategy is known as diversification . The goal of this strategy is to insure success by investing in a wide range of stocks. For example, one set of stocks may be doing poorly while another group may be performing very well. This is known as being negatively correlated. One should take note however that more stocks does not always mean more success. An investor who has more than 15 stocks in a portfolio may be taking a risk.Once a strategy has been put into place, it is important to have an alternate plan of action. Because the market is constantly changing, one may discover that the investment strategies they have chosen may not be the best for the goals they set. This where the alternate plan will come in handy. Careful planning ahead of time will help prevent ones investment goals of becoming unobtainable due to a sudden change in the market....
