If you want your money to grow you need to look beyond traditional avenues of investments such as bank deposits and mutual funds. Talking about mutual funds especially the equity funds you may have already seen the high return on investment. If you wish to go higher you need to start investing in the share market. Here you will be able to exponentially grow your wealth in a quick time. But as you may be aware share market investments has its own risks and you can minimize them following few cautious steps. Here we look at some of the things beginners need to keep in mind while investing in share market –
Invest Surplus Capital Only
As a thumb rule you should invest only surplus capital you have in hand. Don’t
borrow or take a loan to invest in share market. Stock markets are defined by
volatility and hence you can’t set a target when you can sell the stocks. So
never invest your emergency money into the markets.
Set Your Investment Goals
What is it you are looking out from share market trading? What kinds of returns
do you expect from the market? Every investor has his/her personal goals with
respect to trading and you should define yours. When you reach your targets you
need to realize your profits.
Don’t Invest At One Go
As a beginner you need to increase your exposure into the market slowly but
steadily. Don’t invest all your surplus capital at one go, Pick stocks you’d
like to invest on and take a look at their price trends before investing in
them. Buy when the market dips and book your profits when the market rises.
Treat Advice Cautiously
You get investment advice from different quarters and hence you should treat
them cautiously. Even the most well-intentioned advice from the top brokerage
can go wrong. As a beginner you should try and look for advice from different
brokerages and other experts and then make your investments.
Diversify Your Investment
Never put all the eggs into the same basket or on other words you should never
put all your money on a single stock or a couple of them. Diversify your
investments among different stocks and different industries. Your portfolio
should have a good mix of large cap, mid cap and small cap stocks as this
strategy would help you earn handsomely and also reduce your risk.
These are basic things you need to keep in mind when it comes to share market trading. As a beginner you will help yourself by enrolling for online stock market courses for beginners. These courses take you through the basics of share market trading explaining to you the best practices as well as technicalities involved in the process. The biggest benefit of taking these courses is the fact that they would help train you in spotting the right stocks to invest on and not burn your investment by taking wrong and unformed decisions.
Summary – In this write-up we take a look at beginners guide to share market investments and how to make money in the market.