Before Investing in Stock Market " 9 Lessons you Must know"
1. Don't follow others:-
There is human tendency
they generally follow other decisions and their actions. Buyer's decision is
usually heavily influenced by the actions of his neighbors or relatives. Thus,
if everybody around is investing in a particular stock, the tendency for
potential investors is to do the same. If you don't want to lose your money
then you must not follow others. The world's greatest investor Warren Buffett
said, "Be fearful when others are greedy, and be greedy when others are
fearful!"
2. Do Through
research before Investing:-
Always do through
research before investing in Stock. But most of Investors generally go by the
name of a company or the industry they belong to. If you are unable to do
research then take the help of financial advisors.
3. Invest only in Business which you know
and understand:-
Always invest in business you Know and have
knowledge of business. Never invest in a stock Invest in a business instead. You
should understand the company business that how they make profit and ways of
selling and buying. Always keep in mind that past track record of company by
reading its financial statements and its trend that if any company has
performed well in past then it is expected to do well in future also.
4. Hold Stocks Patiently and follow well disciplined
approach of Investment in Stock:-
Always follow systematic
approach in investment and keep patience to get handsome returns. In One day no
one become billionaire. As even bull run
of market some investors ends in losing money as they don’t have patience’s.
5. Don’t be Judgmental and keep your emotions:-
Never fall in emotions
and take emotional decisions. When market is in bull run then greed becomes so
high to get more returns that will ultimately results into losses and on the
other hand in bear market investors through their stocks just at bottom price
of stock. Never ever Judge the market You can’t judge that Market is at low now
it’s time of investment and on other hand it is market high so exit from stock.
Stocks have their own fundamentals and never go along stock market. There are
stocks even when market is in bear phase stocks had given excellent returns.
6. Diversify
your Portfolio:-
Diversification is
the key for getting returns. Never ever just stick to a particular stock and
segment , Diversify your portfolio into different sectors as different sectors
perform well at different times and will leads to get good returns.
7. Always Expect realistic return and loss:-
Whenever you are
investor invest in a stock then always expect a realistic returns and set goal
of returns from a particular stock don’t expect unrealistic returns. At the
same time when you are expecting returns from stocks you must be strong enough
to book losses at particular loss that you will be expect. You can’t expect that this stock will get
doubled in one year and on the other hand this is low of stock and I should
hold it for one more year.
8.Monitor your portfolio Regularly:-
You must know what
is happening in world, there are events that impact financial market so
constant monitoring of Portfolio is required. Don’t just buy and forget to
follow the stock for long time. Always keep track of your company in which you
invested as sometimes company development get restricted due to Govt. policies
or external factors e.g. Mining is banned for Sesa Goa and co.s like Financial
technologies whose stock one trades above 1000/- now trades mere around 160/- So
always keep an eyes at stocks in which you invested.
9. Invest only your surplus funds:
It’s very hard to
earn money in this world. Don’t throw this money. If you want to invest in
Stock market then you must invest only surplus funds after all spending keeping
in mind. It is not necessary that you will lose money in the present scenario.
You investments can give you huge gains too in the months to come. But no one
can be hundred percent sure. That is why you will have to take risk. No need to
say that invest only if you are flush with surplus funds.