Once a person begins earning, the will need for saving and investing some funds for future monetary targets also arises. However, when it comes to investing, most young persons stay clueless.
There are different solutions that can be looked at for investing such as mutual funds, debts, equities, fixed deposits, physical gold, genuine estate and so on. All of these solutions come with distinct levels of dangers and returns attached to them. Experts say one ought to diversify one’s portfolio to cut down the dangers and optimize gains.
Everyone desires to earn sky-higher returns in the shortest time feasible. Hence, most young investors are ordinarily attracted to the equity markets. Risk and return go hand in hand and stock markets are risky and difficult. Traditionally, persons believed that it is akin to gambling and hesitated to invest in the stock market place.
Vineet Patawari, Co-founder and CEO, Stockedge, says, “The scenario has, however, changed over time and it has been realized that taking calculated risks after proper research is actually beneficial.”
Here are a handful of points newbies in the stock markets ought to be conscious of to steer clear of generating losses.
Fall prey to strategies – If you genuinely want to invest in equity markets then you need to save your self from blindly following the investment strategies provided by random persons. Experts say this is exactly where most persons make the error. Thousands have lost their difficult-earned funds by naively following strategies. Hence, no matter how profitable the tip appears, you ought to refrain from investing unless you study it correctly.
Invest all at when – For new investors, stock markets are a new avenue and the markets are unpredictable. Patawari says, “As a beginner, invest cautiously and in small amounts. If your corpus is Rs 1 lakh, then start by investing say Rs 10,000 and gradually scale it up. This way you will have time to learn from your mistakes and rectify them.”
Be more than-intelligent – Industry professionals say, no matter how a lot of books or blogs one reads on stock markets, the uncertainty about it persists. Patawari says, “Don’t be under the bubble that you know it all. Having knowledge helps in imparting skills learnt but is not enough.”
Variable Investment horizon – Be positive of your investment horizon and make allocations accordingly. It could occur that a stock fluctuates a lot in the quick term but at some point offers excellent returns in the extended term. In such scenarios, it is recommended not to sell off the stocks fearing losses and staying accurate to one’s targets.
Playing with a number of methods – Most investors, professionals say, have the habit of varying methods. This could possibly not prove to be fruitful. Patawari says, “In fact, most times they are very close to making profits but change strategies and have to start again.”
The dangers in equity markets are equally higher as the rewards earned. The complete thought is to determine the appropriate entry and exit time of the market place and book earnings. Experts say this is only feasible by correct study and evaluation of the prospects of the enterprise and by adopting attempted and tested methods.