You’re investing in stocks — good for you!
Are you interested? Haven’t you?? Every one of us is interested in multiplying our savings or residue income. No one wants to keep their earning stored either they are earned from a good source or the bad one. “The hunger for money never ends”.
Now, you have to make a decision either to multiply it through a planned strategy while investing in stocks, bonds or to handover them to the fraud companies who assure you with the advertisement like “Double your money within a month”. You better know that and if you are smart enough then while making a smart decision investment in the stocks is the best option for us. We just need some basic knowledge to have a startup. Let explore HOW?
A stock market, equity market or share market is a place where there is a cluster of buyers and sellers who facilitates the trade of public listed companies inclusive of shares of common equity, corporate and convertible bonds or some other security types.
Stock( aggregation of shares ) can be only bought or sold on the condition if listed in a stock exchange. India’s premier stock exchanges are:-
- NSE – National Stock Exchange of India Ltd.
- BSE – Bombay Stock Exchange
A company needs to be listed in any one of them for practicing the stock exchange while fulfilling some legal formalities.
Essentials while Investing in stocks for dummies
We see many people around us losing their hard-earned money in “share bazaar” just in few seconds while also heard about some people like Mr. Warren Buffet who become the richest person in the world from the same. So, What’s the difference between the both? How to make money in stocks? You can do so by keeping some basic point in your mind that we had discussed here.
Buying a Business
While buying your first share keep in mind that either you are buying a business or a company. As you are getting the share in the frequent profits and losses that the company faces. That’s why “Shareholders are the owners of the Company”. Sounds really good.
Smart enough, to avoid an influence
A typical buyer has a herd mentality that needs to be avoided but not always. Being a buyer he always relies upon “heard and does rule” that is his decision is heavily influenced by the actions of his acquaintances, neighbors or relatives.
But this strategy is associated to backfire in the long run. Analyse your surroundings and make smart decisions while avoiding blind moves. That’s why the world’s greatest investor Warren Buffet says
“Be fearful when others are greedy, and be greedy when others are fearful!”
Invest what you understand
Go with your interest, knowledge and understanding i.e, to chose a business in which you are interested and have enough knowledge. Don’t put your money just on the basis of a company’s goodwill instead invest in the business the company is in.
Investing without analyzing the business, checking the trends and not making the proper investigation comes under the section of gambling.
Decide whether to gamble or to invest!!
Never take decisions on the basis of emotions
Once, Warren Buffet himself said that “the biggest mistake which I had ever done is to mix emotions with the decision”. Market emotions are defined as greed and fear.
In a bull market, Greed augments tend investor to speculate in unknown companies after hearing stories about fabulous returns which in return burn their fingers very badly as the market trend reverses.
Similarly, In the bull market with a feeling of fear investors sell their stocks at the rock-bottom prices. Thus, the fear and the greed are the worst enemies that need to be avoided while making investing decisions.
Approach professionals for guidance, if necessary
Being a beginner or first – timer in the market, you might be unknown to some technical terms of the market. In such case, you can avail some professional help like learning from a financial advisor, hiring a tutor or to approach investment advisor.
Plenty of information is available over the internet but a teacher would help you to identify and provide direction for your actions. With their help, you can expertise until you are able to analyze the trends and can take your own decisions.
They might charge a nominal fee for this service but the upside or learnings you get, besides the profits, are priceless.
Don’t afraid while investing in being a new investor. Invest your time towards clarifying your goals regarding your fund investment. This would make half of your task easier. Now analyze the various options and analyze the market trends. Explore more about the technical terms of the market. In case of any issues, don’t shy to take professional help. .It would only do well for you and your investments. Remember “Half knowledge is dangerous, on their basis investors create their own paradigms results in losses”.