The bait of big money has always attracted investors towards the stock markets. However, making money in equities isn’t easy. It not just needs a great level of discipline and patience, but also a great deal of research and good insight of the market. Also, stock market volatility in the last few years has left investors in a state of bewilderment. Though there’s any sure-shot formula yet to be discovered for success in stock trading, there’re a few golden rules which can be followed sincerely to boost your odds of getting a decent return.
Never take decisions based on rumors:
Proper research should be the cornerstone of taking your investment decision. You need to keep in touch with the market all the time to understand which factors influence the market and in result your stocks. A regular screening of the shares you trade is pretty critical to take the perfect action. Always try to make decisions based on strong evidence supported by right report from the right source.
Always take calculated risks:
You’ve to take investment risk as per your risk bearing potentials. Comprehend your commitments and dependents and take risk in a smart way. You can only lose money that which can afford to lose.
Steer clear of the herd mentality:
The normal buyer’s decision is generally influenced by the actions executed by his or her relatives, neighbors or acquaintances. Therefore, if everyone is investing in a specific share, the inclination for prospective investors is to do the same. Unfortunately, this strategy backfires most of the time, especially if you are a long-term investor.
World’s best investor Warren Buffet certainly not incorrect when he said, “Be scared when others are greedy, and be greedy when others scared!”
Invest in a business that you understand:
Never invest in a stock! Instead invest in a business that you understand. In other words, prior to investing in a company, you must have idea what business the organization is in.
Don’t allow emotions influence your decision:
A lot of investors have been losing money in stock market because of their lack of ability to control emotions, especially fear & greed. In a bull market, the bait of quick money is tough to refrain. On the other hand, in a bear market, investors panic & sell their stocks at rock-bottom prices. Therefore, fear & greed are the worst emotions you can have when investing, and it’s wise not to be influenced by them.
Hone your skills of stock trading and investing on the TSX here at Train2Invest. Feel free to call us on 1 204-414-9106 if you’re interested in our consulting services or need advice.
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