- It is very important to do proper research before going ahead with the money and investing in a business or company.
- There is no surety whether you will loose the fund or win big returns in near or far future, so invest only if you have surplus funds.
- No matter which company you choose to invest always do your research.
The stock market is a risky business, and it is often seen as gambling by the layman. The stock market is always a risky and volatile place to invest hard earned money, and many see it as a game of luck.
Since nothing is predictable in the stock market, it is hard to decide when to invest, sell or hold shares in the market.
However, here are couple of proven strategies that will help you to make some good money in the stock market.
1. A financial plan
Before diving into the game of stock market, it is important to have a financial plan in place to keep a check on your essential expenses and not to drive yourself into a crisis situation.
Investing in stock market is a long-term commitment and you should be ready to handle the short-term expenses without depending on the returns from the shares.
2. Need of surplus funds:
Invest in this volatile market only if you have funds that you think you can efford to loose or are willing to take a risk on. There is no surety whether you will loose the fund or win big returns in near or far future, so invest only if you have surplus funds.
3. No herd mentality:
It is common to follow others when it comes to stock market but it can backfire and there is no guarantee in this market. So, it is advisable not to follow the herd-mantality and follow your own judgement.
4. Business and not stocks:
Rather than stock, you should invest in businesses in which you have fair understanding. You should be aware of the company and its business to know where you are investing and monitor the investment.
Also, if you invest in company or businesses, you can always trace its history of growth and fall you make a better investment decision.
5. No time is the best time:
The stock market needs commitment and trying to time it is not something that successful investors do. No one can predict the stock market trends and so trying to time it is a waste of time, investment and energy.
Have some patience and try to make an informed decision.
6. Diverse investments:
Don't put all your money in one place as that might increase the chance of losing it all in one go. In other words, don't put all your eggs in one basket and try to invest in different businesses and companies to ensure that you don't suffer from big loss in one go.
7. Informed decisions:
The stock market is altogether a different ballgame in terms of investment and returns. So, it is very important to do proper research before going ahead with the money and investing in a business or company.
No matter which company you choose to invest always do your research.
8. Margin of safety:
This is a safety net that reduced the chances of losing big money. If the stock price is low, it provides a high margin of safety since if the business fails to take a leap as expected the loss will still be low since the stock prices were low.
9. Fear and greed:
Two factors that often drives the investors is fear of losing money and greed to earn more. When it comes to stock market, both these emotions that prove to be fatal. So, keep a check on your emotions and invest with intelligence.
Last Updated 31, Mar 2018, 6:47 PM IST