Stock Tips - Stay Local To Succeed

With serious declines in the stock market at the end of 2008, many people are looking for stock tips to recoup losses or take advantage of the current state of the market. One temptation is to look at other markets and think about investing overseas to try to obtain an edge on the global financial cycle.

However, some top investment advisors are pointing out that the local markets may be more lucrative for traders. This is especially so for those unfamiliar with stock markets and for those without the ability to monitor investments on almost a 24/7 basis.

Entering a foreign stock market comes with several disadvantages, and not least is the difference in time zones. Unless you have the resources or inclination to watch stocks at all hours of the day and night, you may find this aspect challenging.

Possibly even more important than this is the acquiring of company information and market sentiment. It can be difficult enough to find thorough reports on companies with bases on Australian shores let alone on the other side of the world, and for many of us, resources and information on foreign markets is going to be less than what we can access at home.

The ASX is as transparent a market as anywhere in the world, and most shares trade with good liquidity. There's a lot be gained by stock trading at home, and local knowledge will also help you assess sharp turns on the major indices. It's important to watch major market indicators such as the ASX 200 when judging the direction of the market.

Finally, staying local should ensure that you stay within the market rules. If you are unsure about local rules, ask your broker or check with the Australian Securities and Investments Commission (ASIC), and take the time to familiarise yourself with what is expected. No matter how big or small the order you place, it's important to make sure you aren't in violation of any of the rules of the market.

Staying local may be the stock tip you need to succeed with your investments, and if unsure, consider consulting a financial professional.