Start Investing in Stock Market like an Expert: A beginner's guide


Investing in the stock market is an art and science both, some people say that it is an art and some are saying science whereas some believe that it is both. Stock Market Investment is an art in the sense that it controls by the emotions of human begin like greed, pride, fear, panic, laziness etc. Some people believe that its science because it has data, one has to do research to analyze the data and come to the conclusion for investment.

Other than fundamentals and technicals of stocks, the market also depends on socioeconomic, political and various other sentiments. If a market is up continuously for 15 days, the sentiments improve and there will be a sudden spurt in interest in buying. If the market falls drastically for a few days, calls from Investment advisers are pinches to the investors and also avoided. The stock market is either hated or most favored entity in the investment world.

Stock market investment
Stock Market Investment Like expert A Beginners guide


The current phase of the stock market is the downward trend since the last two months, where market corrected almost 20 percent and mid-caps are corrected 50-60 percent. Almost 500 stocks are trading below 52 weeks low. This is the phase where retails investors keep themselves away from the market. But actually, this is the right time to enter into the market.

Why investing in stock market is essential:


The bonding with the investors and The Stock Market is very strong, once you are invested in the market it is very difficult to stay away from the market for a longer time. The growing inflation, changing lifestyles, long-term obligations such as children education, marriage, medical emergencies are few which requires some good amount of savings for every individual. The interest earned on savings should be more than the inflation otherwise savings will never grow. During the past few years, interest earned through banks and other government securities have dropped substantially. So the only option left is The Stock Market, it has the power to beat the inflation, it has consistently provided a higher return than banks and fixed income. But one should invest in The Stock Market in a systematic and disciplined way, not like gambling then only it can give good return consistently. Also read our article Investment and Financial Planning here

The Stock Market investment if it is done in a systematic and disciplined way can give 15 to 25 percent return per annum. One should not expect anything more than that. Though some stocks give return more than that one should book profit in a disciplined way and compound it properly. If one wishes to earn 20% percent annually then the investor should search a scope to invest twice a year and book profit at 10 percent. Similarly, if there is 10 percent loss one should exit the share. Investors are advised to try the strategy first in a virtual stock market terminal.


Do's and Don't of investing in the stock:


Some investors lose money in Stock Market because lack of proper investment strategy, greed, fear and panic, one should make an investment plan as mentioned above and invest in a disciplined way. Investors can build their portfolio and churn the portfolio time to time as per the strategy. While making portfolio one should make according to his age, risk-taking capacity, other sources of income and obligations. It is advisable that one should properly diversify the portfolio and should never put all his egg in one basket.

There is a saying in the market that "don't research your stock after investing, it is always better to do research your stock before investment". The fact is beginners get the recommendations or tips from Business news channel, Website, Apps etc and without knowing the company they put their hard earned money. Whenever the stocks started falling or investors get stuck that time they started doing research and gathering more information about the stocks from here and there. The process is absolutely wrong one should do research first about the company and then put money for investment. You can also read our article "how to make money from the stock market- combine fundament and technical analysis".

Conclusion:


Though "Investing in The Stock Market - A beginner's guide" is a vast topic, we would definitely make a series on this topic. To conclude the article I would suggest one should do his own research first before investing, an investor should not expect brokers to give advice on stocks. Brokers can only give views about the stocks, if an investor is registered as a PMS services holders with the broker then it is a different ballgame altogether. Investors should have a proper plan and strategy for investment. One should make his portfolio and monitor it closely and if require should churn the portfolio as an when required. It is advisable not to greed or fear in the Stock market because most investors lose money in greed and fear. Investors always wait to book profit on top -getting the exit rate on extream top is next to impossible. Whereas Investors always find difficult to book losses when the market reverse, one should also learn to book loss in the stock market otherwise a small loss would become the mother of all losses. Investing in the stock market is not a rocket science, people from the various different background are successfully making money only thing is one need to check his or her emotions and should use common sense for investment.

Also, read "Do you trade in the stock market on Stock News? Avoid five common mistakes to earn money".

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Happy Investing!

Finogyan Team


Start Investing in Stock Market like an Expert: A beginner's guide Start Investing in Stock Market like an Expert: A beginner's guide Reviewed by Finogyan on October 25, 2018 Rating: 5

2 comments:

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  2. This article has opened my eyes to certain things about the stock market and investing. I commend the author for his ingenuity.

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