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Businessman and dollar sign

Globe editors have posted this research report with permission of The President's Club Investment Letter. This should not be construed as an endorsement of the report's recommendations. For more on The Globe's disclaimers please read here. The following is excerpted from the report:

Give someone a fish and you'll feed him for a day. Teach someone to fish and you'll feed him for a lifetime. Leaning on that wisdom, we've cobbled together a list of advice for the stock investor. It's based in large part on questions that we get from subscribers and mistakes that we observe they sometimes make. It's not exhaustive, but it's time tested and we know you'll improve your returns if you can apply these rules.

1) Know your advantages and use them. Remember that you are a retail investor. That means you have disadvantages over the big boys (the pros and institutions). But you also have advantages over them, notably a liquidity advantage. The cheapest stocks tend to be illiquid. Bigger investors can't buy them because they can't get in and out without really moving the stock price. But you can. You can also get in and out of stocks that they do own more easily than them.

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