Basic norms and Tips on Investing in STOCK Market

Stock Market is a place where lot of money is made and lot of money is lost. Nobody wants to lose money. Here are some basic norms and tips, to make sure that you don’t lose your money in the stock market.

Be careful about the stocks you pick because there are always some right stocks to picK

• Don’t put all your eggs in one basket. Old adage; yes same for the stock market.Never invest all your money into one company. Diversifying into different companies and sectors means that you are reducing the risk.
• Don’t invest for short term. You should have a long horizon when investing in the stock market. Invest only your long term money into stocks. If you invest your short term money into stock market you are at a very high risk
• The basic logic of business should be observed, buy stocks when they are a low price and sell when they are high. There are various finance portals where you can research on stocks.
• Invest in fundamentally strong companies. Look for the company performance,business and integrity. Invest some time to learn the basic concepts of investment like the P/E ratio, the internal rate of return etc. Then analyze the finances of the company you want to invest into.
• Have patience with your stock, stock prices fluctuates all the time. Look for long term results rather than making shot term gains.
• Keep a track of your trading and your profit. As someone gets into active trading, it will be difficult to track your investment, profit and brokerage once you lose track. Spend some time everyday to track your finances.
• Analyze market trends. Market trends are good indicators of the way market is progressing. Market experts provide insight into market trends.
• Research before you invest; sound research is the root to success. It is always best that you yourself do the research, if you don’t have time, get it from somebody who does it professionally.
• Be ready to lose something to gain something. Ideally the stock market return should be considerably higher than returns from a term deposit. Otherwise there is no point in investing in the stock market.
• There is no right time or wrong time to enter the market. Markets keep fluctuating and there is no upside and downside. Be careful about the stocks you pick because there are always some right stocks to pick. Fundamentally strong companies are prone to less fluctuation.