Do you know earnings from stock market depend on your approach?

In lure of big money people are attracted to share market but let me caution you making money in stock market is not easy. It requires a lot of patience, a disciplined approach, sound research, and analysis apart from many other factors.

The stock market is volatile and this has confused a lot of investors and traders alike. They are in confusion, should they buy, sell or hold on to the equity. There is no sure shot formula to succeed in the stock market, but there are few unsaid golden rules that will increase the chances of getting good returns.

Research before you invest

One should conduct proper research before investing in stocks and in actual practice, it is rarely done. Investors look for the name and brand of the company. Some have a preference only for particular industry or sector or brand and that is not the right way to put your money.

Only invest in the businesses that you have some knowledge about

Never invest simply in a stock instead invest in the business. When you buy shares you are a part owner of the company. So before you invest you should know what the company’s business is.

Never ever try to time the market

The stock market is highly unpredictable even Warren Buffett does not try to time the market, he does have his view about the price level an individual share can go (upside or downside). Majority of investors just do the opposite.

Avoid following the leader blindly

Usually, it is seen that the investor his highly influenced by his family members, friends, colleagues or acquaintance while investing in shares. Did they conduct an analysis before coming to the conclusion what to buy and what not to buy? Another tendency is to buy those shares that everyone around is buying, following the herd mentality. This strategy is sure to backfire. In Warren Buffett words: “be fearful when others are greedy and be greedy when others are fearful”.

Your strategy should have a disciplined approach

Volatility is a part and parcel of every stock market. It is seen that even in bull runs there are bouts of panic moments. In this volatility, many investors lose money even in bull runs. There should be a systematic and disciplined approach for generating good returns. Calculate out at what price you wish to buy shares and at what price you wish to sell themuntil then hold on to it.

Let not emotions come your way

Do not be carried away with your greed or fear emotions. Investors lose money because of their inability to control their emotions. The stock market is not the game for speculation. Analysis and proper calculations will create wealth for you; use your brain instead of your heart.

Let your portfolio be sufficiently broad

Diversification is the key to reduce your risk. Diversify your folio across different asset classes. This diversification depends upon your risk taking capacity. Also do not over diversify.

In case you need any help or have any queries regarding which stocks which should be bought or sold you can contact us and we will be glad to help you out.