Stock market tips: MUST do & must NOT do
What you must NOT do
1. Do not panic
The market is usually volatile. Take this fact as truth and avoid panic.
If the prices of your shares have plummeted, there is no reason to want to get rid of them in a hurry. Stay invested if nothing fundamental about your company has changed.
2. Don't make huge investments
When the market dips, go ahead and buy some stocks. But don't invest huge amounts. Pick up the shares in stages.
When the market dips --buy them. When the market dips again, you can pick up some more. Keep buying the shares periodically.
Everyone knows that they should buy when the market has reached its lowest and sell the shares when the market peaks. But the fact remains, no one can time the market.
It is impossible for an individual to state when the share price has reached rock bottom. Instead, buy shares over a period of time; this way, you will average your costs.
Pick a few stocks and invest in them gradually.
3. Don't chase performance
A stock does not become a good buy simply because its price has been rising phenomenally. Once investors start selling, the price will drop drastically.
4. Don't ignore expenses
When you buy and sell shares, you will have to pay a brokerage fee and a Securities Transaction Tax. This could nip into your profits specially if you are selling for small gains
What you MUST do
1. Get rid of the junk
Any shares you bought but no longer want to keep? If they are showing a profit, you could consider selling them. Even if they are not going to give you a substantial profit, it is time to dump them and utilise the money elsewhere if you no longer believe in them.
2. Diversify
Don't just buy stocks in one sector. Make sure you are invested in stocks of various sectors.
Also, when you look at your total equity investments, don't just look at stocks. Look at equity funds as well.
3. Believe in your investment
Don't invest in shares based on a tip, no matter who gives it to you.
Tread cautiously. Invest in stocks you truly believe in. Look at the fundamentals. Analyse the company and ask yourself if you want to be part of it.
4. Stick to your strategy
If you decided you only want 60% of all your investments in equity, don't over-exceed that .This will help you limit the losses and protect your capital.
~| Co - Admin Of SMICE [Share Market Investors Club @ EK] |~
What you must NOT do
1. Do not panic
The market is usually volatile. Take this fact as truth and avoid panic.
If the prices of your shares have plummeted, there is no reason to want to get rid of them in a hurry. Stay invested if nothing fundamental about your company has changed.
2. Don't make huge investments
When the market dips, go ahead and buy some stocks. But don't invest huge amounts. Pick up the shares in stages.
When the market dips --buy them. When the market dips again, you can pick up some more. Keep buying the shares periodically.
Everyone knows that they should buy when the market has reached its lowest and sell the shares when the market peaks. But the fact remains, no one can time the market.
It is impossible for an individual to state when the share price has reached rock bottom. Instead, buy shares over a period of time; this way, you will average your costs.
Pick a few stocks and invest in them gradually.
3. Don't chase performance
A stock does not become a good buy simply because its price has been rising phenomenally. Once investors start selling, the price will drop drastically.
4. Don't ignore expenses
When you buy and sell shares, you will have to pay a brokerage fee and a Securities Transaction Tax. This could nip into your profits specially if you are selling for small gains
What you MUST do
1. Get rid of the junk
Any shares you bought but no longer want to keep? If they are showing a profit, you could consider selling them. Even if they are not going to give you a substantial profit, it is time to dump them and utilise the money elsewhere if you no longer believe in them.
2. Diversify
Don't just buy stocks in one sector. Make sure you are invested in stocks of various sectors.
Also, when you look at your total equity investments, don't just look at stocks. Look at equity funds as well.
3. Believe in your investment
Don't invest in shares based on a tip, no matter who gives it to you.
Tread cautiously. Invest in stocks you truly believe in. Look at the fundamentals. Analyse the company and ask yourself if you want to be part of it.
4. Stick to your strategy
If you decided you only want 60% of all your investments in equity, don't over-exceed that .This will help you limit the losses and protect your capital.
~| Co - Admin Of SMICE [Share Market Investors Club @ EK] |~
