So here are the 6 Basic rules every beginner investors should follow
Before doing any kind of Investments we need to properly research and understand whether the investment is worth it. Having good knowledge about the investment makes us aware of all the probable problems we may face in the due course or else we may be prey to the unknown issues, to be precise, we may end up losing the whole invested money. When we do not have any idea of the various aspects of the particular investment we are doing, we have no way other than just following others and their opinions. Better stay safe, take your time and cement your basics.
Most people or investors do not actually know the Company makes money. They just invest in some stocks blindfolded. They might have seen someone else made or making money from that stock and hence they might be taking such a step. Advice would be to Invest in Companies that you understand. If the business model is clear then we can think the next level thinking to what is the current scenario of that industry, the demand, the market, competitors, etc.
Markets keep on going up and down. No one can accurately predict what will happen in the very next minute or the next day. Future is highly uncertain, so is the Stock Market. Never predict by mere speculation. You can perform strategic trading if you relevant knowledge in that and a big NO for speculation. A person may win once, twice and maybe even thrice by speculation, still, the person is stupid!
Humans are built-in with hell lot of biases. It is when you recognize it, you start to be precautious the next time. Seeing is different, Noticing is different. Hearing is different, Listening is indeed different. Learn about most of the Biases and when they get triggered, before delving into real-world investing because this is the only area where even stock experts fail to resist.
Books are the man’s best friend, certainly after a dog :). Investors need to read such books of great experienced investors, look for their lessons learned, understand what mistakes they made and you try to stay away from such mistakes. Active reading is expected or over the time you may cease to read books. Have curiosity about everything. If curiosity dies in a person, then that would be certainly like killing the life in that person. Keep reading, Keep learning. Warren Buffet and Charles Munger are best examples for this.
Investing is more about under from various verticals the business, overall industry, World, and many more influential factors. If you are new to this Stock Market Investing and have no technical understanding of various aspects in it, Investing must be probably based on some social media opinions or TV channel opinions or any random rumor. The possibility of you making money in such a case is almost null. And if suppose with some extra plausible efforts you happen to complete the learning and now you know various stock analysis techniques and approaches, you are all set for it. But the factor now comes is – Time. Most of the Retail Investors are majorly Full-time working people. When will they have time to do the homework? If they find time for the same and earn money too, then they really owe a big salute in such a case! If at all they cannot find the time and don’t have sufficient market knowledge, they too get an opportunity as we are in a democratic country. They can look for trustworthy & certified Investment Advisors and Portfolio Management Services to whom they need to pay a very small amount as fees, rest they will do the work for you. We too offer similar kind of services and we are glad, we have only happy customers. There are many firms too in India. Be safe as there are many fake firms too, just do some research work before approaching Investment firms. There do come many trade calls from Indore area telling that they give trade advice. Don’t fall prey to such people.