Opportunities in the stock market are aplenty. That’s what draws people. But it can also be a tricky business. You need to know the ins and outs of the market before going into the share market live. Market knowledge is crucial for success, but so are patience and discipline.
There is no one magic formula for success in the stock market. Your chances of profit will increase with some tricks under your belt. Here are five things to keep in mind while investing in the share market live:
1. Know the Business
Investing is not just about picking a stock. It is also about putting your money in companies that succeed in the future. That is why you must understand the business you are investing in. Do not trust random advice on which stocks to invest in. Instead, take your time to understand what the company does, what its financial health is like, what its growth prospects are and its position in the market vis-à-vis competitors.
2. Follow a Disciplined Approach to Investing
The volatility in stock markets can throw the best traders off their game. Sometimes, during a moment of panic, you may want to sell your shares if the market drops too low. Or greed may get the better of you. Instead of resorting to emotional moves, have a solid trading strategy. Journaling is one way to track why you chose to invest in certain shares and under what circumstances you would sell them. Use techniques like stop-loss while trading in the share market live to determine where you want to cap your loss.
3. Diversify Your Portfolio
Never put all your eggs in one basket, no matter how promising stock or a sector looks. That’s a rookie mistake to make. Always pick stocks from various industries and be involved in different businesses to create a holistic investment portfolio. That way, if one or two of your stocks tank, then the rest of your portfolio can hold you up.
4. Monitor Your Investments Regularly
Often, people say that you should invest in stocks and then forget about it. A prudent investor would never do that. You should constantly evaluate your positions to understand how they are performing from time to time. That doesn’t mean checking in every day. Once every quarter is plenty enough. If a company’s shares aren’t living up to your expectations, don’t be afraid to rebalance your portfolio.
5. Take Your Time
Don’t invest in a hurry. Take your time to understand the market and the companies before investing. Also, build your positions gradually. You don’t have to go in with all your money at once. Instead, break your investment into chunks and enter the market when the timing is right. Or, you could have a strategy wherein you invest a certain sum of money every week, month or quarter.
Action Points
- Don’t try to get “lucky” with share market live Instead, be smart with your investments.
- Gather enough knowledge about the market and company.
- Choose an excellentstockbroker to invest with.
- Be a rational investor.
Disclaimer – ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. – ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai – 400 025, India, Tel No : 022 – 6807 7100. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
