You need a plan

Where am I?

Where do I want to go?

How am I going to get

there?

What are my chances

of success?

Read the following statements and

think about the actions of each person…

Jack Hackett was out on a Friday night and

was talking to a few mates. One of them

said that he had a red hot tip. He had

heard from a friend of a friend of a cousin

of a stranger who overheard a

conversation at a bus stop.

He immediately bought 10,000 shares on

Monday at 5c.

Mrs Doyle while having some tea, went on

the internet and found a numerology

website which proclaimed to have great

stock market strategies.

One such example was to buy the top five

stocks of an American index at 8 p.m. on

the night of a full moon and to sell them at

the Spring Equinox at 2.45 p.m.

She thought it was worth a try!

Dougal has a big interest in the stock market

and has done a number of courses on how

to profit from it.

He buys a book in Morocco that promised

anybody can make 50% growth in the year,

but it requires a lump sum of €50,000 to

start, 50 hours a week of research and an

accounting degree.

He buys the book, thinking that it can’t be

that hard and he will manage it alright!

Ted works in the I.T. sector and knows his

industry very well. He does a lot of

research to find some highly

undervalued stocks. He buys them and

leaves them alone.

He looks back in seven years time and

finds that they have doubled, but had

been at 500% after two years.

What do you think of these decisions?

Would you have done the same?

What do you think the likely outcome of these scenarios would be?

What could you advise these people to do instead?

He has no idea why that person at the bus stop felt the “hot stock” was a good buy.

He only bought one stock and didn’t spread his risk or diversify at all.

He didn’t look into the stock at all himself or get a knowledgeable opinion.

He didn’t have a plan as to when to sell

The strategy she found was not time

tested.

She did not check the credibility of the

author

He wasn’t willing to give the research

the time in order to follow the strategy,

which was time intensive.

He didn’t have the skillset to be able to

replicate the strategy, which clearly is

not easy to follow.

He didn’t have a plan as to when to sell

the shares

Easy to Follow

Time Tested

Make sense!

Understand why you’re buying

Know when and why you will sell

A number of stocks

“The stock market is just

for gamblers”