Investors usually turn to the equity markets due to the lucrative opportunity they provide. However, a lack of basic knowledge of the stock market, market indices, and other related information can lead to a bad experience. But the good news is that by conducting thorough research, deploying the right strategies, and keeping patience, you can definitely reap the benefits and book good profits. What if we tell you that you too can invest in the equity market even as a beginner?
All you have to do is learn basic technical aspects, do your research, and most importantly avoid the mistakes mentioned in this article. Let’s take a look at some common mistakes to avoid.
All you have to do is learn basic technical aspects, do your research, and most importantly avoid the mistakes mentioned in this article. Let’s take a look at some common mistakes to avoid.
1. Investing without vision
Know what your goals are and how soon you need the returns. For instance, if you want to invest in your child’s higher education, you map the timeline and accordingly invest for the long term. On the other hand, if you want to earn profits immediately then you can invest in stocks that can earn you money in a short period of time.
2. Falling for rumors
As an investor, it is pretty obvious that you will be exposed to market news, rumors, social media, and so on to gain insights into the market. However, learn to filter out what is true and what is not. Investing based on rumors can ruin your investment portfolio. So what to do? Invest with the help of a trusted guide or a broker who will give you the right guidance. You can contact us to explore various investment opportunities.
3. Poor planning
This is one of the most common mistakes that most investors make. Many investors turn to equity without proper planning and end up losing funds. Although the equity market is exciting you must not forget that it is volatile. Investing in the equity market without planning can turn into a disaster. So, always have your plan ready!
4. Holding on when you must let go
Although optimism is healthy don’t turn into an optimist in the pessimistic share market trend. Avoid trading when the market is going downwards hoping that the market cannot fall any further. Equity market trends, both, upwards and downwards are a result of several micro and macro factors. So, when investing don’t hold on to the stocks that are risky.
5. Putting all eggs in one basket
However lucrative a few stocks may seem to you, avoid selecting only a few stocks instead spread the risks evenly. For instance, if you have 50,000 INR, allocate 5000 INR to each of 10 different stocks. This will bring down the risk considerably, in case if the price of one stock falls, you have invested in other stocks to be on the safer side. While this decreases your chances of a bumper jackpot had you invested more in a star performer, this strategy also protects you from the downsides when the markets tank.
6. Considering only short term gain
Aiming to earn profit only in the short term can have severe repercussions on your investment portfolio. Short-term gains with a focus to earn only in a short period of time can put a lot of pressure and can ruin the investment portfolio. Instead, aim for both long-term and short-term profits.
So, these are some common mistakes you must avoid to shield yourself from losses and instead book higher returns. If you have any doubts, please feel free to contact us.
