Stock Market Investment is a good method of making money only When you do it with much care and attention. Most people think that stock market is good place to make money. If so all stock traders and stock market investors must become multi millionaires and billionaires. But the reality is not that. When you try to invest in stock market, learn the market and the stock well and starts only after collecting all information and necessary analysis.
You must be aware that nobody can become rich through stock market within a short time. When you enter into stock market you should know this fact and go ahead only with the real facts. You should not trust the advertisements and rumors. Learn everything well and go ahead with confidence.
Invest in a particular stock or in a particular sector only after doing careful market study and independent analysis of the stock you wish to buy. You must not believe others, even if it is the top most investment guru Warren Buffet, without proper self study.
Give much attention to stock investment and watch the market carefully. You never think that you can be a good trader by doing stock trade just like a part- time work or as a hobby. You can do stock trade as part time work or as hobby, but the net result will be a heavy loss.
Do not follow blindly the activities of the other traders, friends or large scale investors. If you follow others the net result will be a loss. You may watch chess while others playing. There may be many ideas in your mind when others playing. But that might not be the idea of the player. Just like in stock trading you could not watch and follow others.
When you invest in stock market, it must not be for a short period. If you do so no doubt you would be a looser in stock market. Stock market trading is just like planting trees. You could not harvest in a short while. Wait enough time to get a good harvest.
When you invest in stocks of a particular company, study all the activities of the company including their business, management, financial status, popularity, goodwill etc. You must know that if you invest in shares of strong companies no doubt you can yield a good profit, if you are ready to wait for enough time.
Do not be panic while selling or buying shares. The market trend be tempting you to sell or buy shares in a particular time. Whenever you sell or buy stock, do it only after a good market study and analysis. This is not a gambling. This is a real scientific trade which has its own principles and methods. So don’t be panic or greedy.
Never enter in stock market with borrowed money. If you take a loan or borrow money from any friends or relatives, to invest in stock market, you could not refund it in right time. The stock market is volatile and one could not foresee the real position of stock market after a stipulated time.
Never invest in stock market with the money you are earmarked for a specified purpose. You could not realize the money when you are urgently needs the money, unless you are not ready to bear a heavy loss. The money you invest in stock market could not easily realize with profit while you hardly need the money.
Do not follow rumors, analyst report, hot stock tips or recommendations of the stock broker. Their strategy or ideas may not help you to get a good profit. They are making such recommendations as a common strategy which may not be suitable for you. All readymade dresses are not suitable for all. You also have a dress in your own measurements. So do not follow blindly such common evaluations.
Diversify your portfolio in a balanced way. Do not over diversify or under diversify. Do it an optimum way of diversification. Only experience can help you here. You can be a good stock trader in a certain period of time with hard work and quality market study. Always remember that Rome is not built in a day.
If you follow all the above mentioned tips, you can be a profitable stock trader and can make money from stock market investment in rainy days or sunny days, in bullish trend or in bearish trend.
(Author – Shyam Dutt Sharma – A CA final student- Email – firstname.lastname@example.org)