The Stock market has a uncertain fascination attached to it. Every investor wants to become the “Wolf’ in their own “Wallstreet” and cheat the reputation and codes of hard work. It has that shine that often leads finance aspirants to an oblivion, but turns out to be a smart gamble if the rules and tricks are absorbed correctly. Since the fantasy land of Stocks continues to attract millions of hopeful contestants, here are few market investing tips and realities that can help you get started:
It’s an opportunity to own an existing business: Stock buying is like buying a stake in any successful business which pays off every month for the rest of the decided engagement by the individual. As a part of a certain proportion of the company, you can reap profits from the stake which involved no hard work, consultation or mentorship.
If you are looking at long term investments, then make sure the following points are analyzed and verified first:
Competition: Watch out for the existing competition of the company you are looking at to invest. Analyze and compare the success rate of both your interest company and the competitve company. There is always a strong possibility that the company in direct competition is performing well.
Divident Yield: It should be known that the dividends are a form of income regulated from the shares. There are companies that offer some cash comfort monthly along with the profits earned by the end of the year.
Value: It is important to know that the company you are planning to invest in, is not trading stocks at valuations that are unwarranted even if the company is performing best in terms of revenue, management and business model.
Understand your risk tolerance and avoid getting tempted by penny stocks: Whenever you step into the stock market, you are observed as a new bait for penny stocks and as a consequence of bombard marketing, you will continuously recieve Penny Stocks Newsletters. These newsletters are sent by brokers and rigid stock companies who have a fragile and bouyant foundation of returns. For your own understanding, you can browse through Google where you would come across results stating that Penny Stocks are a scam. It is suggested to learn how to buy shares online without a broker and calculate your own risk tolerance.
Read Stock Market or investment related books: Learning from the wise will always dust away doubts and inhibit more confidence. Before making a debut in the gladiator ring of the stock market, here are few investment and stock related books that you can read:
Winning on the Wallstreet: This one is for serious investors and covers economics, technical and fundamental analysis.
How to make money in stocks: This bestselling book will help you develop a good framework on how to create your own stock market investment approach.
One up on Wall Street: This book is best for beginner investors.
Trade like a Stock Market Wizard: A Practical guide that teaches the application of technical analysis in the stock market.
Gather all the information you need: Before spending a dime, it is critically important to know left, right and centre of the company you are deciding to invest in. You should be able to get your hands on:
Annual reports: Companies that have listed their stocks in the market for long, would definitely have their annual reports submitted online. Browse through the documents and finalize your decision wisely.
Check out Company Press releases and BSE/NSE announcements: Many companies that have listed their stocks online, release their annual, quarterly, or monthly presentations along with few press releases. These documents will help you analyze the performance of the company.
Online Media: It is well-known that any company listed on the stock market will have bought media presence. You can cross check their online media presence in order to gain an idea of their views, plans and strategies.
Have a one-on-one session: Although this is not followed regularly, but still you can get connected with the board of the company and communicate with them regarding the nature of their revenue model. This is best for long-term investments.
Final Words: To keep your wealth intact, it is necessary to safeguard your priorities and understand the risks involved before spending a single dollar. The stock market is a puzzler and is dynamic in nature, which means that no long term predictions can be made or derived. So in case you are a beginner, you can start small, grasp an understanding of the stock behaviours, and then increase your money investments. Buy good bargain stocks and safe stocks, as they will help you in times of market collapse. You can always connect with experienced stock buyers and design your own investment style.
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