Action Alerts Plus portfolio manager and TheStreet's founder Jim Cramer has learned a lot over his 30+ years of investing. So he created a list of 25 Rules for Investing that can help you avoid the novice pitfalls that even he fell into on occasion.
For instance, many investors speculate on companies with bad fundamentals, thinking the company many one day be a takeover target.
But it rarely happens.
Rule 10: Bad Buys Won't Become Takeovers
"The odds are that you will end up owning something that could go down much more than you thought, but that has very limited upside," says Cramer.
"You can make much more money buying a company that is doing well and can still get a bid, than you can buying a company that is doing poorly and is unlikely to get a bid."
So watch Cramer talk about Rule #10 above -- and why you again should do your homework before you buy a speculative stock.
Sign up and watch Jim Cramer's 25 Rules For Investing here!
Watch More of Jim's Rules for Investing:
- Jim Cramer's Rule 1: Bulls Make Money, Bears Make Money, Pigs Get Slaughtered
- Jim Cramer's Investing Rule #2: It's OK to Pay Taxes
- Jim Cramer's Investing Rule #3: Don't Buy Stocks All at Once
- Jim Cramer's Investing Rule #4: Buy Damaged Stocks, Not Damaged Companies
- Jim Cramer's Investing Rule #5: Diversify to Control Risk