How to invest in the stock market

There are many different ways to invest in the stock market there
are a wide range of financial products from mutual funds, stocks
and shares bonds and index trackers that will allow you to gain
from the stock market. Many people use a buy and hold strategy
where they buy a stock or share and hold it for twenty years or
more this strategy is not the best because the market moves in
cycles and alternates between bull and bear markets. Obviously
in a bear market which is a fall of around 20% or more your stock
portfolio can be decimated and some of your stocks could even be
wiped out as was experienced in the bear market of 2002 to 2003.
Many people Lost 82 to 100% of them money in certain stocks many
of the stocks have never recovered and some have even gone bankrupt.

One of the first rules of stock market investment, is to never let
a stock lose more than 7% of its value, when a stock falls by 5% is
time to seriously think about selling it and look for other upward
trending stocks. Many investors like to hold on to a stock that they
have fallen in love with in the hope that it will regain some of its
losses and turning to a winner, this occasionally happens but not very
often so the best course of action is to sell keep the majority of your
equity ready for your next purchase.