It is a surprising fact to know that Indians are averse to investing their money at the stock market. Yes, stock markets are volatile. Though returns on investment are on the higher end of the spectrum, the risk involved is also equally high. It is for this reason, quite a lot of us are skeptical about investing our hard-earned money into shares, stocks or derivatives. These are the top six secrets you need to know, to emerge as a successful trader or a stock broker.
Let us know how:
You have to buy low and sell high
When share prices fall or dip in the market, this is when you need to buy shares and while the price of shares goes higher up, this is when you have to sell your shares. Though this sounds quite simple, how many of us actually follow the thumb rule?
A Hindustan Unilever share that was bought for INR 100 per share 10 years back is selling at INR 900 today. What if you have 1000 shares? You can make a profit of Rupees 800,000. Selling price is 900*1000= 9, 00,000. Buying price is 100*1000= 1, 00,000. Difference amount is your profit margin. (9, 00,000-1, 00,000).
Market fluctuations are a part of the game
Swiss chocolates have always been in demand, whether the markets are bullish or bearish. The economy has faced recession, but the Swiss Chocolate making factories have not shut their doors closed. Disney land has always fascinated the holidaying crowd. It hardly matters whether the economy is facing recession or not. People prefer buying Apple lap tops or mobile phones, no matter what. Apple Inc., Swiss Chocolate factory and Disney world have faced terrible market fluctuations. But these are companies that have stood tall. Similarly the investor needs to take the ups and downs of the market in his/her own stride and strategize moves accordingly.
Long term returns can help you in a big way
You need to look at a company after thoroughly analyzing the half-yearly or annual profit margin reports, before you plunge into buying stocks or shares of that particular company. Short-term or windfall profits are not going to be a long-standing solution to investing your hard-earned money into the shares, stocks or derivatives of a particular company. Analyze the 5 year charts of the company and then zero in. You need to study, how stock markets in India work, to get a deeper insight on the same.
Get the basics right
Learn the stock market basics, how to trade effectively, current market trends and so on, before you trade in the live market. Quite a lot of trading companies provide you with an online trading program helping you get your basics right. They also teach you how to work on a trading platform without any hassles. There are a couple of free downloadable trading platforms, as well. You can search the internet, to get a cue on the same. You practice your transactions on a dummy platform, before you start trading with a live dealer.
Invest in shares of companies that offer dividend from time to time
Apple’s share price dropped from $ 110.38 to $ 105.26, in 2015. That was a market decline of 11%. But investors, who owned the shares of Apple Inc., just lost 3%. How is it possible? The reason is, Apple Company offered its share-holders with a dividend of 5% during the course of the year. Investing in shares or stocks in companies that offer you a sizeable amount of dividend are worth considering over companies that do not offer dividends. You can learn Stock Market Basics by reading renowned books written by world-class investors like Warren Buffett or Carl Icahn.
Curb your tendency to make more money
Quite a lot of ambitious brokers or intra-day traders make this particular mistake. When they know that their day at the trading market is not going all that great, they still try making more money. They push the buttons through multiple transactions. In the whole chaotic scene, there is every possibility of the entire investment getting wiped out, in one shot. Never make this mistake.
While your day at the stock market is not all that great, just leave the table and strategize your moves for the next day; and, then start trading afresh.
These are important factors, tips and techniques pertaining to stock markets. Stock markets in India are definitely booming for you to make all the money in the world.
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