2021-07-14
Stock market investment is risky. Like any other investment, it also has some degree of risk that investors are compelled to bear, if they are to get the return. If someone efficiently manages the risk then it is possible to minimise the chances of losses and reap the benefits. Financial markets are dynamically evolving. New products, new regulations, new practices are continuously being added and you need to keep up with those changes in this dynamic ambience. Investor Think You Tube channel will always help you to bring those aspects to your palm top, as and when these directional movements take place, in addition to helping you to take your investment decisions on your own. Furthermore, carefully designed courses are available on this web site to level up your knowledge to invest wisely in stock market. All in all, I would like you to have a good understanding of the following, before you invest in Stock Market.
- Understand your Risk Appetite
In simple, this is the level of risk that an investor is prepared to accept being within the comfort zone. Only you know your risk appetite. Therefore if you totally rely on others investment decisions and copy, think twice. Do not rely on others recommendations when it comes to investments. Take your investment decision on your own being in line with your risk appetite. For you to do this you need to level up your knowledge and a set of skills to develop.
- Never Invest In Something that You Do not Understand
Very simple. If you allocate your hard earned money in somewhere, expecting it to grow, without knowing how to realign your investment from time to time, your expectations will never become a reality, unless you are really lucky. Don’t let luck alone to play the role. You need to drive it with your knowledge.
- Following the herd will not take you anywhere
You follow the herd because you feel insecure of being not following others moves. This state of insecurity in your mind will totally be wiped out if you have the necessary skills and knowledge, thus you take the decision if and only if that decision is rational.
- Consider Dollar cost averaging, be less aggressive if you are new to market
Many come to market to get overnight gains. Yes, you will get overnight gains if you are lucky. But as previously said, don’t just let luck alone to play the game. Your input is necessary. With “dollar cost averaging,” you can protect yourself from the risk of investing all of your money at the wrong time by following a consistent pattern of adding new money to your investment over a long period of time. By making regular investments with the same amount of money each time, you will buy more of an investment when its price is low and less of the investment when its price is high.
- Rebalance your portfolio
Some stocks might run faster than others. Stocks which ran faster, might have now become little slow due to internal/external factors. Evaluate them rationally. Pay due attention to your Return on Investment (ROI). If you are not happy with the pace when compared to the risk that you have borne, consider rebalancing.
- learn Fundamental analysis
Understand the intrinsic value of a stock based on its financials, macroeconomic environment, microeconomic environment and other qualitative factors. When market value falls below the intrinsic value grab the undervalue stock. This is discussed in depth in the “Fundamental Analysis Course”. Idea is to inculcate value investing among investors.
- learn Technical analysis
What do stock price patterns tell you? Does your intuition ring a bell when you see price patterns? If not then consider learning Technical analysis with the application of them rationally. After performing an extensive Fundamental Analysis of a company you should be prepared to get the stock at the best possible price available in the market. Know the right time to enter/exit a stock. Get the best out of other investors psychology. This is discussed in depth in the “Technical Analysis Course” which is elaborated in a simplified, and practical way.