1. Always research your market first. Before jumping into any kind of investment watch the market trend. Is it a Bull or a Bear market? What market industry are you most interested in?
2. When you have decided on a market industry, work out who the market leaders are and investigate the companies you are most interested in. Find out all you can about them.
3. Now that you have worked out who you are interested in investing in, think about how many companies you want to invest in. If you are just starting out, keep the amount of companies you want to invest in to a small number. Pick out the market leaders and follow them.
4. Work out the best time to buy in. If you are not sure when the best time is, avoid companies who are expecting good results in their quarterly and annual reports. These companies usually will see a rise in their share prices just before good results are released.
5. Work out if you are investing for growth or income. If it is for growth, go for growth industries. You may have to wait longer for pay back in growth industries, but overall results are generally better.
6. Don't listen to rumors about companies. You should avoid investing in any company on the strength of the latest rumors.
7. If possible, invest in a market leader that is overpriced. Why would you want to do that? A market leader (such as McDonalds) is entrenched in the market as a strong performer. Market leaders perform well over a substantial period of time. It is worth investing in them.
8. Buy low and sell high. This is the most common strategy and a good one to adopt, although hard to work it out when you are a new investor. If everyone could do this, we'd all be rich! You will get better at this as you gain more experience in reading the market.
9. Buy and hold. Once you have studied your market and selected the best company for you to invest in, buy the stocks and hold on to them. Try not to panic sell if the stock price slips a little. You will need to have an exit strategy, just in case, but making money on the stock market can take patience.
10. Know your exit strategy (for example a drop of 25% of the buy in value). Once you have reached your exit strategy, sell. This is known as the stop loss limit and should be adhered to, to avoid getting caught in a market crash.
11. Buy and change often, especially if you are investing in value (income) stocks. If you know your market well you will know if there is a limit to the expected gains from a particular company. If you think you have reached the potential of your shares in this company then sell and select another investment.
12. Try and keep the emotional element out of your investing. The stock market does not always act as you think it will and can be a perilous place when certainty turns to fear.
Remember that a lot of factors influence how a company will perform and your strategy will not be foolproof. However, find out what will work for you and follow that strategy. It will help you keep track of what you want to achieve with your investments.
