Do You Have the Right Stuff to Own Stocks in Today's Volatile Market?

Today's market conditions require that investors commit a considerable amount time following the market, researching stocks, learning about technical and fundamental analysis techniques and sorting through the myriad of investing information.
If you're not willing to be a totally committed investor, perhaps you should consider avoiding stocks altogether and simply stick with cash. Being a casual investor is a recipe for losing money.
Here's a checklist to help you determine what to do. If you answer no to any of the questions, you may want to avoid investing in stocks.

Question	Answer: Yes	Answer: No	Comments
Do you have a specific investment goal and a plan to implement it? Can you write down your plan?	Own stocks.	Do not own stocks.	A general goal like "I want to make money" is not sufficient. Be specific. For instance, a legitimate goal would be, " I want to accumulate Rs. 200,000 in 10 years and I will invest Rs.5,000 each month for 10 years in large companies that pay dividends."
Can you avoid withdrawing money from your portfolio?	Own Stocks.	Do not own stocks.	If you need to regularly withdraw money from your portfolio for living expenses or other needs, keep most of your money in cash, not stocks.
Do you know how to interpret a price chart pattern? Would you learn to read price charts?	Own stocks.	Do not own stocks.	Is the stock on the upside or downside. Is it making a price bubble? Is it at an all-time low. Do you know the significance of a chart patterns?
Do you use technical analysis? Would you learn the basics of technical analysis?	Own stocks.	Do not own stocks.	For instance, do you know how moving averages work?
Would you follow the price of your stocks at least once a week?	Own stocks.	Do not own stocks.	Monitor prices to discover price trends.
Would you follow the news about your stocks at least once a week?	Own stocks.	Do not own stocks.	Staying current lets you know why a stock increases or decreases in price.
Do you know how to value a stock? Would you learn how to value a stock?	Own stocks.	Do not own stocks.	Know the financial fundamentals of a company. Can you understand a balance sheet?
Can you eliminate emotions from your investing decisions?	Own stocks.	Do not own stocks.	Anger and depression cloud sound buy, hold and sell decision making.
Can you admit when you make an investing mistake?	Own stocks.	Do not own stocks.	Blaming others for unprofitable investments doesn't let you learn from your mistakes.
Would you read and study at least five classic books about investing?	Own stocks.	Do not own stocks.	Learn from the great investors. Follow their money-making practices.
You do need to regularly withdraw money from your portfolio?	Own stocks.	Do not own stocks.	If you need to regularly withdraw money from your portfolio for living expenses or other needs, keep most of your money in cash, not stocks.
Would you sell a stock for a small loss to avert major losses?	Own stocks.	Do not own stocks.	Losses are part of investing. Get used to them. Preserve money for the next investment.