Taking your first dive into investing could be a nerve-racking. Where should you invest? Who could you trust? And the most traumatic of all: What if you lose money? Do’s And Don’ts in Share Market…
Investing your savings is the ultimate key for reaching long-term financial goals, and it doesn’t needs to be an arduous or stressful process. Just follow these do’s and don’ts of stock market:
Following are the Do’s And Don’ts in Share Market
- Purge the junk
There might be some of the investments which you have done earlier but now they might be not good enough to hold. If they could be sold off for a profit, you might sell them off. Even in case they might not give you a considerable profit, it is better to dump them and invest that money elsewhere
- Diversify your portfolio
Don’t just invest in stocks pertaining to a single sector. Ensure you invest in stocks of several sectors.
Also, when you are looking at the overall equity investments, you should consider equity funds too.
- Have faith in your investment
Do not invest in stocks based on any advice or a tip. You should trade cautiously. Invest in only those stocks which you have clear idea and you believe in the financials outlook of that particular company. Have a look at the fundamentals.
- Never panic
The stock market is very volatile. Accept this fact. It would keep swinging .You don’t need to panic if prices of your stocks have dropped. Unless some fundamentals about your company have changed dramatically, stay invested.
- Don’t invest too much
When the market falls you can buy some stocks. But ensure you don’t over invest. Always keep some savings aside and pick few companies after careful analysis. It is impossible to predict for an individual whether the price of a particular stock has reached its bottom. You should buy shares periodically; this way, you could average out your costs. Pick few stocks and invest gradually.
- Don’t overlook expenses
When you trade shares, you are required to pay brokerage and STT (Securities Transaction Tax). This could eat away your profits particularly if you are selling off your investments for small gains.