Whom do you believe when everyone is offering stock market advice? How do you proceed when some of the advice on the stock market and the economy is mutually exclusive? In short, this article is a caution on taking stock market advice.

We hear that the market will be very volatile this coming fall. We hear that the economy has rounded the corner and that the stock market is ready to take off. Every market columnist promotes a different stock or sector giving its own set of reasons for why this or that stock or this or that market sector will be a winner.

Anyone who has been investing in stocks for a period of time has found good information reading stock market advice. Anyone who has been around for awhile has been badly stung by believing the stock market advice that they read and followed.

So, in whom to you believe? Experience is a great teacher. Some sources of stock market advice tend to be well reasoned, backed up by facts, and not exaggerated. If you have followed this person’s advice before and won then it improves the odds for the next time. However, better than believing in the writer, learn their method and believe in that.

It’s the method that will give you results time after time. That is how to proceed. Let the investment article call your attention to a good prospect. Then do your own homework. If you don’t understand the stock market advice that you read then study it. Go to the source material and study. See if you come to the same conclusion as the author. If you don’t come to the same conclusion, try to understand why.

Working from the same information should, in general, lead you to the same conclusion. If you have different, or less, information find out how to get the stock market information or information on the economy that you need.

Most market indicators are generally available. It just takes a little time to consult them in a timely manner. We have generally advised a weekly check of your stock market portfolio. If you have written yourself a paragraph or two about why you bought a stock, under what circumstances you will sell, and under which circumstances you will buy more, then apply the same reasoning to a new purchase.

The economy is, in fact, recovering. The stock market has recovered a bit and will likely continue to improve, but that doesn’t tell you which stock to buy or sell.

One thing to avoid in taking stock market advice is changing overall strategy. When the stock market takes a turn there is always someone who caught the move at the right time and did spectacularly well. This may have been very smart or it may have been lucky.

When you read about “how I did it” try to go back to the beginning and follow the reasoning. It should make sense. If the writer is talking about totally different strategies and tactics than you use please forego the temptation to totally change course.

If you are going to become a day trader, for example, after years of buy and hold investments, feel free, but realize that this entails an entirely different set of skills than those which you have practiced.

Sometimes the best response to one of the “how I did it” articles is to say to yourself, “Good for him,” and go about your business of making money the way you know how to.

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