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How to invest in stock market?

Investing in share market has never been easy and remember it will never will. But by following certain points a beginner can avoid lots of negativity related to market.
  •       Avoid the herd mentality-A typical trader or investor always takes a decision influenced by neighbours or relatives. But this strategy is going to backfire in long run.No need to say that you should always avoid herd mentality if you don’t want to lose your hard earned money. The World’s greatest investor Warren Buffet was surely not wrong when he said, “Be fearful when others are greedy, and be greedy when others are fearful!”
  • Taking informed decision-Proper research should be done before investing in stocks. But that is rarely done. Investor generally go by the name of the company or the industry they belong to.
  •  Invest in business you understand-Never invest in a stock. Invest in a business you understand. In another words, before investing in a company you should know what business the company is in.
  • Don’t try to time the market-One thing that even Buffet doesn’t do is to try to time the stock market. A majority of investor does the opposite and thus lose their hard earned money in process. Catching the top and bottom is a myth.
  • Follow a disciplined approach-The investors who put in money systematically, in right shares and held on to their investments patiently have been seen generating outstanding returns. Hence it is advisable to remain invested for long run taking broad picture in mind.
  • Don’t let emotions cloud you investment-The fear and greed are the greatest enemy of investment. Don’t let both of them to control your investment idea or investment should not be guided by fear or greed.
  • Create a diversified portfolio-Never ever rely on one share or one sector rather invest in different sectors or in different shares. Level of investment and diversification depends on risk taking capacity.
  •  Have realistic approach-The approach of investment should be realistic as expecting 50% return is very much unrealistic. There is nothing wrong in being hopeful but unrealistic approach will lead to trouble.
  • Invest your surplus fund-Never depend only on stock market for your bread and butter. Rather invest your surplus fund because there is always a risk involve in investing.
  •  Monitor rigorously-Review your portfolio time to time of if you can’t review your portfolio due to time constraint or lack of knowledge, then you should take the help of a good financial planner or someone who is capable of doing this.


Comments

  1. Good article Nilay
    Wish u a very happy b'day :)

    Brajesh

    ReplyDelete
  2. Only those who buy the fear and sell the greed, Can earn In this mkt .

    ReplyDelete

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