Stock or share market can be very lucrative. One can probably double or even triple ones investments in a years time when the market is bullish and things can turn the other way round when the trend is bearish .
Investing in the stock market is not an easy proposition. It involves taking a certain amount of risks . In Stock market, the returns are very quick and with luck one can multiply money many folds in a matter of a year,s time as I mentioned earlier , but, there are certain risks involved too.
Stocks are very good investments especially if one goes in for a long term investment and is able to sell keeping a certain amount of profit margin, it is only when one is greedy that the problem comes in.Although shares bring a lot of profit in a short time, one should be able to get out and get in at the right time to make money out of stock market. Since Stocks and shares have their own ups and downs and unless one is able to sell and buy at the right time, not much money can be made.
One must remember that one should never be greedy and book profits as and when one can.
A few helpful tips to bear in mind while dealing with the stock market 1, Buy shares only after making a thorough investigation - mainly the reputation of the company ,and its performace.
2, Buy only when the market is bearish and the prices have come down considerably. Always buy in small quantities. You can keep buying more when the prices come down, so that you are able to bring down your average price per share.
3, Always diversify your portfolio .Do not invest in any one type of share, it is always a better option to go in for different kinds of shares like software, pharma, banking, automobile, oil, cement etc;
4, After calculating a profit margin for your shares like 50% or 100% or whatever seems most probable - when the share prices reach that target sell your shares immediately , since stock market is very volatile and just when you think that prices are going to sky rocket, they may begin to dive.When the markets are bullish one should be selling one's shares.
5, If you want to stay invested in share market for a long time it is wiser to sell at highs and buy back the shares back at lows. By doing this you keep making a small amount of profit sometimes a huge amount of profit if you are lucky when the prices flutuate too much. And most importantly , since you are buying and selling the shares you own , the risk factor is hardly there , provided you keep in mind to sell your shares only after you reach your profit target .
6, Day trading can be highly risky and very few people are able to sustain making profits in the long run. So, it is always better to buy shares when you have some extra cash and wait for the prices to go up considerably...
7, When prices fall ,Never sell in a panic and incur losses.Prices will eventually start going up. One needs a lot of patience and day today monitoring of share prices to make any substantial profit.
One must be cautious and remember that it is better to make smaller profits by playing safe than to go in for huge losses by taking any risks because all said and done Stock Market is addictive and can ruin you financially if you are greedy and do not understand the fundamentals of the market.