Which are the Best Share Market Tips for Beginners?
Here we have come up with some Share Market tips for beginners and for all the Retail Investors out there so that they(you) fall less prey to losses and at least the principal is recovered.
Tip no. 1: Never keep short-term goals in Investing
We know, you must be thinking by now that, to be successful one needs to keep multiple short-term goals. And those small achievements snowball to a path where one finds his/her long-term goal.
BUT, here in Investing, things do take time. We need to be patient enough till the money commences its making process. By investing, one needs to understand that if we widen our eyelids a bit more than usual we will see ourselves then as the business owner(though a small portion).
And, Businesses do take time to get their sales money realized. Some Clients do pay on ready cash but also pay on credit(or later). Let the business get their complete sales money back, let them reinvest it and allow the tree to grow.
Tip no. 2: Stay away from emotions
This tip is applicable everywhere in life most of the times albeit realized once we get hit straight on the head!
Unless emotions are mutual do not let it flow out of you or else you will be left hurting yourselves.
We, by human nature, are likely to get into emotional bias with some particular stock. We start fearing when stocks move down and get happy when it goes up.
Follow certain entry and exit strategies while investing. Do the Company’s Financial analysis properly. Understand the business model and forecast its position in the market for a long-term period.
Then, Invest, if you are pretty confident about the business to grow and just forget about it for years!
Tip no. 3: Make Sure you have done your homework properly
Knowing about the business you are about to invest in, will actually help you know one of the reasons behind its share price fall/rise.
To understand the business profile of the Company, all relevant financial numbers, and its rationales, one is expected to go to the Company website and look for its Annual Report. This is the step which most of the Analysts around the World use for their Fundamental Analysis of the Company.
If as a Retail Investor, things(Annual Report jargons) may seem tougher for you… But do not lose hope. Try looking for other sources that explain about the Company over the Internet.
If you still not finding any relevant information about the Company you wanted to invest, feel free to ping us either through our website’s chatbox or through any of our social media page, We will help find relevant information you need.
Tip no. 4: Diversification is the key
Say you invest in one stock all your hard earned money. OMG! The stock went down the next minute.. the next day.. the next month.. the next year!!
You feel you are down now and won’t drive up. This is a highly vague situation wherein we cannot comment without knowing properly about the stock, entry point, exit point, and many more parameters.
But in the same case, if the person would have invested the money bifurcating into different business driven stocks then it might happen that at least the “red” of one stock gets balanced by the other’s “green”.
It is always recommended, while in diversification, to invest in stocks having different businesses/industries. However, there are people who invest in the same industry company stocks, we call them “Fools!”