With the advent of technology, gone are the days when stock
market investors had to make frantic calls to stock brokers in order to be able
to trade. With widespread use of personal computers and the internet,
everything can now be done on the click of a mouse button. The convenience has
led to many people trying their hand at it. The following tips will help kick
start the investment plan.
a) First and
foremost, it is important to know that stock market investment is a risky
business. The risks involved are such that it can lead to loss of the complete
investment amount. Different sections of investment have different degrees of
risks involved. However, solace lies in the fact that profits, if made are also
high on margins.
b) It is
advised not to take up loans in order to participate in stock market investment
business. Loans would need to be paid in full while there is no guarantee that
the markets would prove beneficial let alone repay the interest on the borrowed
amount. It becomes even more important a factor when the investment has to be
done in high risk stocks.
c) Expecting
gains is alright. But expecting a jackpot on the very first day is not
realistic. The share market has its own ways of repaying the investor. Of
everything else, time is the biggest factor. Giving time for the investment to
mature is important.
d) Amateurs
at the stock exchange should avoid market orders at all costs. Instead, prefer
limit orders so that no preemptive decisions are made.
e) It is vital to understand the stock
being invested in before actually making the purchase. Doing a bit of research
will help calculate whether the company is expected to make profits in near
future. For example, check the company's estimated profit projections and
success history in the past. Try and relay only on genuine sources for
information.
f) Unless
the market crashes or there is a sudden boom, do not expect a drastic change in
the share prices. Market indexes fluctuate not because of high changes in a
small number of stocks but marginal changes in large number of stocks.
g) Expendable
money is the only money that should be invested in the stock market. That is,
money that can be lost. Effectively, money that is meant for current or future
plans like personal finances, retirement fund, buying a house, paying
children's college fees etc. should not be put into this business. This is
because if they money is lost, it will not go down well with the investor and
his family.
h) Investing
everything in a single stock is the biggest crime that can be committed.
Diversify the investment in order to lower the risks and also make profit from
different sectors. No one likes to miss out on the profits of a sector just
because zero investment was made there.
Keep the above mentioned tips in mind while logging onto an
investment website. It will go a long way in making everything comparatively
safe and secure.
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