Why should you diversify your share portfolio?

Dictionary meaning of diversification is – having variety of character or form or components; or having increased variety

It is a familiar term for many investors. In a nut shell “Do not put all eggs in one basket”. An investor diversifies his portfolio as a vital part of financial planning and also to maximize return on capital. One can diversify his investments into different shares or different asset classes like real estate, bonds, gold, bank deposits etc. When one asset class fails to give proper returns it is balanced by another asset class. For example, when stocks are moving down gold moves up and vice versa.

diversify investment portfolio

We will see the advantage of diversification and how we can profit by diversifying our capital and minimizing (containing) our risk.

  1. Economic crises – Portfolio diversification can prevent you against the risk of economic crises (mostly during external aggression or war). When financial market crashes (Lehman Brothers) suddenly assets like gold are seen as safe heaven to park your investments. And when the bull market is on run assets like stocks give a good return on your investments as compared to gold. So if you have diversified into gold and shares your loss in one asset class is covered up by another asset class. Diversification can be used as a safety net.
  2. Tax advantage – It is a great way to save taxes on profit earned. Investment in stock for more than one year is not taxed. Similarly, there are tax saving mutual funds (3 years lock-in period). Also, deposits in PPF (deposit, accrued interest, and withdrawal, 15 year period) are also tax-free to the certain extent. So diversifying your portfolio into stocks, mutual fund, and PPF (and many other) you can save on tax from your investments.
  3. Sectorial advantage – When the government announced schemes/policy like home for all, affordable housing, decrease in housing loan interest rates, etc construction sector will get the boost. As part of a diversified portfolio if you have shares of companies dealing in construction and allied field you will get good returns on investments. Trump’s announcement gave the boost to American IT sector companies and demoralized Indian IT sector. How to make money in Indian stock market and in which sectors to invest in so as to diversify your risk to the minimum.

You can diversify your share portfolio across various sectors like banks, cement, automobiles, pharma, telecom, energy, IT, FMCG, consumer goods, metals, media, and entertainment etc, and also across large, mid. small micro and mini caps, that is market capitalization. See Indian stock market overview for more sectorial details.

  1. Overexposure – One should not be overexposed to one sector or asset class. Say you keep on regularly buying shares of one company says ABC which is in pharmaceutical sector deriving most of its revenue from the USA. Now USA changes its policy and ABC cannot sell to the USA and suffers the huge loss. Since you have been accumulating shares of ABC for a long time your return on investment wipes out. There are many myths about Indian stock market which should be dispelled among the general public. Across asset class, those who have invested their lifelong income only into reality, because of demonetization, RERA, other policy have suffered a huge loss on their returns. Had the investor diversified into shares, gold, bank deposits etc. he would have lessened the loss on return. One should know when to sell shares to make profit.

Purpose of diversification is to minimize risk and provide meaningful gain, so as the financial goals are achieved and can have a comfortable retirement and a life one dreams of.

How to choose the right stock broker?

For investments in stocks, one should have broking account. This can be opened at any brokerage house. Hence one should take almost care with whom you are opening your account with. This impacts your overall returns, ease of doing business with and increasing your wealth in long run through proper guidance and research.

How to choose the right stock broker

There are two types of brokers

 

A) Full service – They provide a variety of services like buying, selling, IPO investments, demat account opening, research, advice on market trends, retirement planning, tax planning etc. They charge brokerage as a percentage of trade value and are bit expensive compared to discount brokers.

 

B) Discount – They provide basic necessary facility services like buying and selling. They charge brokerage on basis of per trade and are cheaper compared to full-service brokers.

 

Before hiring services of any type of brokers, you have to decide how often you will trade. If you are investor and trade very rarely than take services of the full-service broker but if you trade very frequently than better go for a discount broker.

 

Before finalizing any broker there are certain points you should analyze. One should also have Indian stock market overview before analyzing the broker.

 

  1. Stockbroker reputation

If the stockbroker is highly experienced and has up to date knowledge of present market trends and inner working, you will be saving quite a few bucks in a long run. To list these types of brokers you can go through official website of SEBI and few stock investment websites. One must also see any issues of complaints or check on their reputation from personal experience of other investors in the market who are/were in contact with the stockbroker.

 

  1. Brokerage fee

Fees like the commission, account opening, transaction, maintenance, transferring money, etc should be taken into account and should be compared with other brokers along with services in each category provided. These fees are associated while working with the broker. For few transactions per month/year, one should opt for brokers who have low maintenance fee and for very frequent transaction per day/month one should opt for a low transaction fee. These fees will impact your overall returns.

 

  1. Technology and software tools

Brokerage firms are increasing capacity and speed by using advanced technology. They are also using these technology models and developing such software tools for market research which gives them more and more perfect trends and up to date information on market conditions to take better and reliable decisions. Choosing these types of brokers to help you make an informed decision and because of speed, real-time executing of your trade will be possible (especially for day traders).

 

  1. Your investing type

If you are a day trader, where your trading volume will be high, a flat fee on transactions which are low should be preferred. Better choose discount brokers.

If you are an investor, who holds his script for a considerable period of time, low maintenance fee brokers should be preferred. Better choose full-service brokers.

 

  1. Local office

If you prefer to talk to an advisor, face to face or on phone for buying/selling your script see to it that brokerage firm has an office or a franchise in your city/town. But if you are comfortable with doing things on your own then local office or franchise does not matter.  Certain brokers have online facilities can be used from anywhere in India.

What Is The Purpose Of Investment In Share Market?

Usually, it is seen that young people desist from investing, especially for long term. On the contrary, they should start investing when they are young because, if money is kept invested for a longer time it gets more time to grow.

Investment In Share Market

The basic idea of investment is to put your money to work for you. One should choose his investment mode or method in such a way that it gives best returns possible over a period of time, say a year or five years or 10 years or more. All investment do rise or fall over a short period of time. That is there is up and down periods in each investment.

Saving is to set aside a portion of your present earnings for future use and investing is to use that saving, in such a way that it grows over a period of time so as to beat inflation.

Many young people avoid investing in stocks (equity) for a long period. They only say that they are still young and have a lot of time on hand for investing. They don’t understand the value of early investing and compounding. If they start early even with a small amount, investing regularly, over a period of time will become huge corpus. They have long working life, approximately 35 years or so, for their investment to grow.

  1. Equity has more potential for growth

It is seen that equity (stocks) have earned more than other saving instruments available over a long period of time and that too consistently despite its up and downs in short term.  Let us see how much return one will get in different avenues that one can invest in.

  • Savings in banks: 4–6% per year (unable to beat inflation)
  • Fixed Deposit: 6–8% per year (nearly at par with inflation)
  • Mutual funds: 10–15% per year (able to beat inflation with good margin)
  • Stock Market: 12–18% per year (able to beat inflation with very good margin)

One can clearly see stocks have the highest potential to beat inflation. Inflation is about 5 to 7% per year. You can make money in Indian stock market.

  1. Do not worry if stock dips or rises

Everyone knows that share prices rise and fall. But in long run, they rise. One cannot lose or gain until one sells or purchases. So if you are having the share and share prices are down, simply don’t sell your script. Or if share prices are high don’t purchase them. Higher or lower value is when you are selling/purchasing it. Not if you are holding it. While holding is only on paper (now a day’s only in electronic form with your DP) it does not matter.

Stock markets are cyclic. So you can hold on to them until your price requirements are met. Once high sell, and then you can again purchase when low. Same company, the same number of shares and at a lower price.

The graph depicts Indian stock market overview of nearly 3 and a half decade.

  1. Mix and match your investment portfolio

One should have a good mix and match of investments. Stocks should also be a part of your long-term investments. The mix of investment depends on your financial situation, your risk taking appetite, your age and time period for which you wish to stay invested.

You can get stock market investment tips from the internet and other sources, regarding how to purchase, which stocks to purchase and when to purchase them, for a long-term wealth building from stocks.

What are the different types of investment risk?

Dictionary meaning of risk is the situation involving exposure to danger, the likelihood of something going against as planned. Before we talk about what are different types of investment risk, they are broadly classified as systematic (huge coverage) and unsystematic one (specific coverage).

investment risk

Systematic risk is applicable to the entire market place. Whatever be the type of investment they come with some in-built risk. Like war or war like situation, an untimely collapse of government etc. The whole market may collapse and it is not possible to protect one’s portfolio from it. Even if one diversifies his holdings he cannot escape the market downfall.

Unsystematic is a specific risk. It affects particular segments of the market, or specific company or specific sector or industry. Like losing a lawsuit, strike by employees, etc. being specific to a certain company. One can control the loss by diversifying investments in portfolio by way of investing into another company or sector.

Apart from these above two broad classifications, there are certain specific types which an investor should know.

  1. Inflation Risk

The real return on your investments gets eroded because of high inflation. If inflation is too high then real returns on your investments can be negative too. In short, your returns should beat inflation by a big margin.

If you invest in FD and get 8% interest per year. And if inflation is 5% then your real return is 3%. But if you invest some financial product where you get 12% return per year than you beat inflation by 7%. In short better the rates of return less susceptible you are towards inflation risk.

  1. Market Risk

Value of your investment may fall due to market risk factors. They can be equity risk (stock market risk), interest rate risk (interest rate fluctuation), currency risk (fluctuation in currency vis-a-vis another currency), and commodity risk (fluctuating in commodity prices)

  1. Credit risk

It is a risk of debt obligation not met. A person or a company who has taken credit from you are unable to pay interest or is unable to return your principal amount.

Government bonds purchased usually has lowest credit risk. In other words investments in government bonds, you are sure to get your investment back along with interest (almost sure but not 100% sure) Though private companies have just a little bit higher credit risk.

Before investing one should check the company’s credit rating by knowing its standing, by reputed rating agencies like CRISIL or CARE or ICRA.

Even banks fixed deposit has some credit risk. In case bank liquidates one will get back the maximum of Rs. 1 Lac as guaranteed by the government.

  1. Country Risk

When ever a country (like Greece) is unable to keep its debt obligations that is defaults its payments, its effects other countries with which it has financial relations and bonds, mutual fund, shares and other financial investment are affected.

Underdeveloped and to some extent developing countries are more at risk as compared to developed ones.

The above risk can be at the micro level (individual) or macro level (country) but they are sure to affect your investments, usually in long run. So it is better that before investing in any financial instruments we should take the risk involved in our investment into account.

When Is The Right Time To Buy Shares?

Investing is both a science and art. It’s the art of using creativity and judgment of science to plan financial goals and maximizing returns. Every one invest money with the main objective of making good returns through them and creating wealth. And shares are one of the most sought after investment channel across the world. Investment in the stock market and real estate are the one that has consistently out-performed all the other investment options in long duration.

Right Time To Buy Shares

Technically share is defined as part or portion of a larger amount which is divided among a number of people, or to which a number of people contribute. Shares are a small part of a company. Owning a share is just like owning a unit of the company. Stock exchanges are the place where one can buy or sell shares.

To master the art of purchasing shares you would need to go through proper channel, for example, you would need to learn first when to purchase, how to purchase, where to purchase, and of which sector’s shares to purchase. So that you could get the most profit out of it.

Today we will cover the topic when to purchase or when it is the right time to purchase shares.

  1. Just after the crash or heavy correction.

When we go shopping, we always look out for sale or where a maximum discount is on offer. Usually, during the festival season we see a lot of sale in an offering, discounts, lucky coupon, scratch and win etc companies vie with each other to attract us.

Similarly (though not exactly) there is a period in the stock market when shares are on the offering with least prices just after a crash or heavy correction. Investors are usually of herd mentality (when everybody is buying they buy and when everyone is selling they sell), they move in direction of what is commonly going on, where as they should be doing just the opposite. Crashes are the time of great opportunity to buy shares because they are available at least prices.

  1. Share price reaches your evaluated price.

One can evaluate the price of a share of the company by using many methods. Fundamental and technical analysis. Fundamental analysis is for evaluating the intrinsic value of a share. It consists of studying everything from the overall economy and industry conditions to the financial statements and management of companies. Technical analysis is for evaluating prices of shares by past prices and volume through statistical methods. Charts are used so as to identify patterns and trends.

This helps in suggesting which direction the shares will move in future and what its present price should be. Once this price is in your target range, shares can be purchased.

  1. Share price target range.

By going through companies past records one can come to a conclusion the highest and lowest price that it has been through. 52 weeks high/low. Or one can take 5 year period. This will help to estimate what the stock’s worth is. Take the lowest price. Add 2 to 3 percent to it (inflation consideration). If the present price is hovering around the lower end than its shares are worth purchasing. Mostly from that point onwards, share prices will move north. Stock exchange website like BSE and NSE publish high/low of the stock for a period of one day to 5 years of a specified share. Investors should have a share price target range in which to purchase.

  1. Purchase when the share is undervalued.

Using discounted cash flow (time valuation of money) analysis for valuation of the shares, by analyzing future free cash flow estimations and discounts them to arrive at the present valuation of shares. The value one derives if higher/lower than the present value of the share is said to be undervalued/overvalued. If the present share price is undervalued then it is worth buying. DCF is usually used to estimate whether the stock presents an attractive investment opportunity or not.

  1. Buy and hold.

Sometimes it so happens that it is better to hold shares for a lengthier period of time (may be 2 to 10 years) to get better returns (defeating inflation at least). Usually, multi-bagger stocks fit in this category. Also if you are holding stocks of the blue-chip company and there is a sudden market crash, one should not panic and sell them for pennies, instead wait for a certain period and you will see that they come back to normal range.

What is the Best Way to Invest in Gold in India?

There are many avenues for investment of your hard earned money. Stocks, bonds, deposits (FD), real estate, equity, precious metals like platinum, gold, and silver (jewelry, bars, and coins), precious stones, paintings, etc.

Investments should always be goal based. The goal can be anything like buying a house (or a second one too), education, tour and travel, retirement fund, etc. While investing never use your heart, always use your brains. Analyze things from the practical perspective. Investing is both a science and art. It’s the art of using creativity and judgment to plan financial goals and maximizing returns.

invest in gold

We will talk about gold investment. Though one can evaluate other viable aspects too.

First question is why should one invest in gold?

Usually, people purchase gold for personal use such as jewelry, coins, to gift it during celebration purpose like marriage, as a hedge during bad times etc. One should also know that it can be used as an investment tool for the future. India is one of the largest markets of gold jewelry in the world.

Like any other assets (real estate, stocks etc.) gold too can be used for investment purpose. Investing in gold can also be treated as an asset class. They give a bit more return than the rate of inflation.

When the stock market rises, gold prices fall, and vice versa. There seems to be some type of correlation. When markets are high one should sell stocks and buy gold as it is cheaper. And when stocks are low sell gold which is high. Sell high (stock or gold) buy low (stock or gold) to get the maximum benefit.

Secondly, the question is how much (quantity) and how to invest in gold?

  1. Jewelry: – Gold can be purchased in form of jewelry and is one of the most traditional way. But purchasing jewelry is not a good form of investment. Because many costs like making charges, etc are to be paid while purchasing and when one sells making charges are not taken into consideration. This way investor loses somewhere around 8 to 12 percent in value. Also, jewelers purchase at rates below present market value on premises that it is not of pure quality. This further decreases its value. Finally, the value that we get is 18 to 20 percent less which in others words less return on our investment. It is a double whammy.
  2. Bullion: – It is better to invest gold in form of bullion i.e. in form of bars and coins. They are of more pure form than jewelry. Near around 24 karat gold. When we sell them they have higher of acceptance in the market and have good resale value. Bullion can be purchased from banks (mostly in form of coin), financial institutions, bullion retailer or jeweler. The rates are spot rates and are usually lower than the market rate. They can be kept in bank lockers and can be sold when the market is in our favor.
  3. Periodical investments: – One can pay for gold in form of systematic investment plan. SIP in local parlance. That is small amount every month. In long run, this small investment accumulates into a big amount. Say you can invest Rs. 1000/- per month on first of every month. Say you are able to purchase X grams in the first month, then in next month with Rs.1000/- you purchase Y grams. So on and so forth. All this small “grams” over a period of time will add up to huge weight. And when payment terms are completed one can redeem the gold. This is mostly done through online purchase.
  4. Invested asset: – Many investment analysts believe that gold should be at least 8 to 10 percent of one’s investment portfolio. In turbulent times (war like condition or external aggression) it should be near around 20 percent.
  5. Investment time: – Experts are of the view that gold asset to give good returns should be held for a period of not less than 5 plus years and purchase should be at a certain interval of time so as to average out purchase cost.
  6. Other forms/methods: – One can invest in gold through “paper gold” Gold ETF i.e. investing in mutual funds which invest in gold, they are listed on stock exchange. One can also invest in the equity of those companies which are related to mining, extraction, purification, and selling physical gold and/or ornaments. But their returns are directly related to the managerial efficiencies of management.

Why should an investor invest small amount every month regularly?

Monthly income and expenditure calculation has become a part of our life. Nowadays we do everything on monthly basis, whether it is brought home grocery or do shopping or pays the bill of utility services like mobile, telephone, electricity, house rent etc. Even we also like to prefer salary on monthly basis instead of daily, weekly or quarterly.  We can say that the monthly basis work is the accurate time as compared to daily, weekly or quarterly. It helps us to budget our money rising so that we should think for monthly investment too. That too for our future of which we cannot imagine the living cost.

According to me, everyone should develop a habit of investing some amount every month. First, save and then whatever remains used for monthly expenses. It does not matter how much or less you are investing every month, rather it is all about improving your compulsory habit of monthly investment and before considering all your expenses that you use as an investment.

Small amount every month

Here, are some points you can consider why should an investor invest a small amount every month regularly.

  1. Power of compounding.

Compounding is a very powerful tool over a long period of time. Very few investors are aware of the power of compounding. Albert Einstein one of the greatest scientists called compound interest “the greatest mathematical discovery of all time.” Let me explain. SI is calculated on the principal the original amount invested. CI is calculated taking into account principal amount and also on the accumulated interest of previous periods, and hence it regarded as “interest on interest.” Your investment amount may be little but investing regularly (every month) and compounded annually adds up to a huge amount over the long period of time.

  1. Earnings to defeat inflation.

One should always invest in those stocks which have been defeating inflation regularly over past few years. Inflation is near around 4 to 6%. So we should see that our investments are giving more than 8 % returns. If they are not giving 8% or more than we should seriously think of other stocks for investment. Regularly monthly investments may give us returns of nearly 15 to 18% thus defeating inflation with a good margin.

  1. Systematic Investment.

By investing every month you will be averaging out on ups and downs of the market. No need to time the market. Most of the investors time and again have stressed of this type of investments, usually called systematic investment plan or SIP in local parlance.

  1. Price factor in Investment.

It is better to invest over a period of time instead of investing in the huge amount at one time and one go. When the market is up you lose and when they are down you gain. When you consolidate your finance you will see that you have averaged out on your investment.

  1. Time factor in Investment.

We all know market fluctuates and mostly moves in cyclic form over a period of time. It rises, rises, rises, and drops suddenly again it rises, rises, rises, and drops suddenly this is called cyclic form. It attains new peaks every few years and breaks the previous high record held. Investing on a monthly basis when the cycle is on rise and then selling once it is nearing its peak keeps our investment safe. After crash again we can continue with monthly investment. Earlier you start investing better it is.

Today you are healthy, energetic, and age in your favor, will it be the same 10 – 20 – 30 years down the line when day to day living costs will be skyrocketing?

Step by step guide to become a full time investor

To become a successful full-time investor in the field of the stock market today, every fresher has a big dream, nowadays. To make this possible, they always find the best method for implementation. The best part of it, there is no need for any type of degree, qualification, and any team.

full time investor

To pursuit this dream is difficult and expensive but it is not so difficult to get it if you do practice regularly. Here, you just need “Patience”, “Energy” and a “Dedication”. But it may be worth the effort. If you have these three qualities, it means that you can become a successful and prosperous full-time investor in the stock market.

Through this write-up, we are providing you some steps, which may help you to make your dreams come true to become a full-time investor.

STEP – 1

Build Capital – It is believed that the stock market is such kinds of place, where you can make money in a moment and in another moment it may lose also. This is a just type of risk, a gamble.

But in this world, there is also a big truth, which is that there are many successful people, who have achieved success by their hard work in this area. To follow these people, you need two ways to achieve such success:

  • Do your own work or work yourself
  • Put your money to work for you or you work for money through out your life.

Investment is the way in which you need a little work but you need money which earns more money. After investing do not panic and have patience. Do not consider your investment as a right of ownership in the company. Your investment compounds, and make another penny, from which you can reinvest for your investments to get a compounded return.

This is the reason why you need some capital to change your financial situation. You should be in a position to invest the sum in 8 digits before becoming a full-time investor. If you do not have resources for that money than upgrade some skill and earn money, then save and invest.

STEP – 2

Prepare your strategy

If you are going to be your own boss, then here you need to create your own plan and strategy to succeed here. For it, first, you need to choose a type of investment, on which you going to do invest.

  • Technical based
  • Or Fundamental based.

After this procedure, you need to choose time period of investment such as

  • Short Term
  • Medium Term
  • Or Long Term

This procedure helps you to make your own strategy.

STEP – 3

Do not quite your job – It’s a lot of misconception that you need to quit your job to become a full-time investor. While investing does not ask you for your full-time. It is wrong to do. Even, if you are interested in investment but never forget that your job is a source for you to for your bad time.

Being a full-time investor with a job can be a bit difficult but not impossible. Here, you need to make some plan, strategy, and routine that helps to manage your both life equally with full of profit. Even after this, if you quit your job then it is not less than any unnecessary risk for you and your family.

STEP – 4

Generate many sources of income – It’s great to be a full-time investor, but still, you have to back up something more. If you are investing all your savings in only one enterprise or venture, then this is not an intelligent step. Keeping all eggs in one basket. Trusting only 1 or 2 sources is also not enough; it may affect your financial life. Depending on single pillars, there are also many negative consequences in the stock market.

This is the reason; here you need to generate multiple pillars for income so that you do not have any effect or trouble in your financial life of any type of disaster.

There are multiple ways to create many sources of income like:

  • Try out index funds.
  • Make YouTube videos.
  • Sell your own products on the internet.
  • Try affiliate marketing and make sales.
  • Put your photography to work on the web.
  • Go safe with high yield savings accounts.
  • Write a book on your favorite subjects.
  • Give your home on rent etc.

Here, you can choose your favorite way to earn money from several ways and stay a full-time investor.

Is it true to make a living from stock trading?

It is a type of mysterious question that has no definitive answer. Trading can be done to survive in life, but this is a difficult task. For stock trading, a very specific skill set and risk tolerance are required, which most of the people do not have. There are a lot of people who have selected this path for a living but it does not apply to everyone. It is attractive to listening but in reality, it is a very challenging task for everyone.

make a living from stock trading

If you are able to do trading for a living successfully means you have achieved the level of excellence in trading, which is the dream of most of the people but the truth is that it cannot be obtained easily by everyone. For this, there is a great need for patience and tolerance in the people. There are the lots of difference between the reality and truth. For example, be an actor or an award winning actor and watching a match on TV or live on stadium etc.

Living on the basis of trading is not just simple because the stocks in the stock market can be up and down at any time. The successful life style with trading also depends on what types of trading you are doing. There are also different kinds of risk, which can sink your money and on another hand, it can make you a millionaire.  It all depends on your types of trading and investments.

Trading is a platform which is used for additional profit. In trading, you can earn more money compared to doing a job. For this you would have to prepare mentally and financially for profit and loss as well. It is packed with up and down therefore economically tight people cannot do it for their living.

If you want to do trading for a living while knowing its challenges then you should process in this sequence: you should have a sound trading method, which takes advantage of instability while keeping risk management as its main principle. Ideally, this method should be tested over time, in all different market environments with real money.

After this, if you want to put your precious time in trading and want to educate yourself on everything related to trading then it must be ensured that you become a trader and not an investor. To become a good trader, you can choose different types of paths like you can read books related to trading, can be aware of daily actions of the stock market through news, you also can read articles related to trading, can get help from experienced person or you can educate yourself even through a trading Institute.

When the goal is to make a living with trading then it is a reliable and consistent revenue stream but it can take the time to get or achieve it. In such case, tolerating the daily fluctuations of your income can be difficult for you. So, here you need to ready for it before implementing.

Stock market investment tips – Do and Dont’s

If you are thinking about investment in the stock market then take time and do research before investment because there are lots of things to do and don’t in the stock market. These things should be followed by investors to generate the profit. There are a number of people interested in stock trading but they have some questions like how I can aware from the loss and how to gain profit in the stock market etc. For such investors, there are no accurate tricks and tips that can help to avoid loss because share trading is pack with uncertainty. You should aware the things that you should do and don’t during stock trading.

indian-stock-market

Do and Don’t in the stock market

1. Patient

The patient works every place, especially in the business. It is very important to keep patient in the field of the stock market because panic will let you down and lead you to more loss. So, accept the truth of stock market before entering into this business because this market is very volatile. It will keep fluctuating. In a moment it can raise your share from down to the up and another moment your shares can be plummet. So, there is no solution to get rid of up and down of the market. Keep patient is the best solution in such situation.

2. Study the market

Before investment in the stock market do your homework and adequate study of the market. Self-analysis of the stock market is better than depend on others’ opinion because it is not sure that someone will tell you the sure shot to make a profit. You should go to analyze the shares, mutual funds and stocks of the market. You also can take help of stock advisory company or stock market experts. You also can read books related to stock trading or take an advice from share market tips company to gain more knowledge about the stock market.

3. Don’t blindly believe on the market forecast

There are no media or TV channels, which can provide you the exact market forecast. It sounds good, pretty and can be entertaining for you but they do not possess any investment value. So, it is important to avoid such kinds of forecast and doesn’t take it seriously.

4. Avoid huge investments

Try to avoid huge investment in the stock market. Buying more shares of different companies is good but sometimes huge investment may dip your money. So, don’t blindly believe or follow the current situation of the share market because it can fluctuate at any moment. There is a simple way to stay long in the stock market that is picking a few stocks and invest in them gradually.

5. No 100% accurate strategy

If any company or someone says, he has the full proof strategy of making good profit from the share market then don’t believe on him. There is no such kind of strategy that works equally well in all situations to gain profit in the share market. Before apply to any strategy, it is good to know the share market tips and the tricks to make money. Before implementing any nifty tips always try to analyze it closely.

6. Avoid short-term strategy

If you are seriously thinking about investing in stock market and want to stay in this field for a long time then you need to make long-term strategies to stay here for a long time. Short-term strategies may give you profit in the few cases but it will not be beneficial for the long run. So to become successful in the world of stock market, you should think from a perspective of a long run.

7. Diversify

The main and very important point of investment in the stock market is trying to buy stocks from various sector don’t invest money in one sector only.

These all do and dont’s of investment in the share market will be helpful to become a good investor in the stock market. For every investor, it is needed to take a logical and careful decision for better return on investment.