It is important to wait to develop a habit of something you have tried once. This is true for all facets in life. Stock Investment is no exception. Not all of us are born or bestowed with the natural gift or knack of investing in stocks. Seasoned investors are definitely the experts in this area but the actual difficult path is for the beginners. It is very difficult to improve and carve a learning path for them so that eventually they end up becoming an expert themselves. But, that should not deprive you from learning the stock market and earning dividends. So here are some cool tips for you.
1. Never be too aggressive or hyper active when you invest in something. Increase/Decrease in prices are obvious in any type of investment. However, it is during this period that a beginner needs to learn certain skills – patience and thoughtful action. Reacting to minor changes might lead to a major cost and money impact on your portfolio.
2. Multiple types of asset classes – zero risk class to riskier ones and similarly do their returns vary. Although risk free classes assures 100 % return of the initial amount of money along with the net profit; higher risked asset classes are the ones that have higher percentage of risk attached to the investment value in terms of huge initial outlay, uncertain returns, fear of initial investment value to get lowered considerably, etc. So one needs to be very careful while opting for the stock. Take a whole picture of the stock, dividend pay-off record, performance of the firm, future plans, etc. Only then decide on the stock you are going to invest into.
3. Be a good absorbent in terms of different sources and versions of news. Such things affect the market sentiments to a great extent so that the beginners fall into the trap and start either buying extensively or selling the same way.
4. Always make a thumb rule of purchasing at a lower cost whereas selling at a high price. If you see that even after some time, the price of the stock has not risen then do not worry. It is always recommended to hold your position for a while until the market stabilizes and volatility clears off.
5. Keep checking the performance of the firm, especially its future plans. This is very important as only this is going to give you better understanding about the returns in terms of profits and dividends that you are going to earn.
More on the way! Keep watching this space and do not be hesitant if you are still a beginner. There needs to be a first chance!
About the Author
Rajat Sharma is a well known stock market analyst and commentator. He has covered Indian markets for over a decade and is regarded for consistently identifying early stage investment opportunities. Attorney by qualification, Rajat has done extensive work for improving corporate governance and disclosure standards.Follow @SanaSecurities