Consider these 5 tips while investing in stock market

Investing in stock has been tedious job until the advancement of technology. Nowadays people are becoming increasingly interested in investing and digitalization of financial services has made it pretty effortless to set up a trading or demat account and it is accessible all across the world. But rather than jumping to the investing world, there are few pointers you might look into to bring out most profit. 

  • Outlining your financial goal

When it comes to stock market, it is a critical step to identify your financial goals as it helps you to figure out an investment strategy with some smart investment apps which will help you the most in the market beaming with tremendous opportunities. It helps you to discover to when to invest and exit ,for how long to invest and the total sum to invest.

  • Know the difference between value and growth investing.

Investors should know which approach they want to follow either of a value investor or growth investor value investor only invests in a company if they see any intrinsic value in their business. They have to go through company’s structure, performance and financial history which enables them to see whether this company will hit the trends or not. If they see potential they invest in that company. If the company does well as they thought it would they gain a lot otherwise even if doesn’t, the loss would not be much as they bought the stocks at a low value so the loss wouldn’t be much.

The second approach is of a growth investor, they are more interested in capital rather than value of the company. They are more likely to gamble on still growing companies. But this rather aggressive approach makes them loose their whole investment if the company sinks.

  • Know your risk appetite

As we have heard everywhere, stock market investments ARE a subject of risks. It is not always reliable and may not always be the goose who lays golden eggs. So you need to know how much loss you can bear. Once you figured out your risk appetite you can choose if you want to invest in short term safer investment such as debt instruments or long term saving goals investment such as gold, equity mutual funds. Once you become a experienced investor you can start investing in commodity trading, f&o’s and day training.

  • Age is a factor.

Though you can start investing whenever you want but it does effect your choice of asset classes. As a young investor you can wait for a longer time for the investments to reach their full potential but with age chances of going with such options becomes slim. Short term investments are considered a safer option because you can exit as soon as you reach your financial goal.

  • Long term investment, day trading or both?

Your choices of investment are defined by your financial expertise and goals which you are supposed to gain over time. Financial institutes, hedge fund managers, professional investors are more inclined towards day trade, arbitrary trading and investing in stock from abroad. As it is said earlier, with time and practice you might as well gain expertise over these investments but still liquidity for this domain and research are what makes you earn most from any investment.

In conclusion, as a newbie investor know your capacity, knowledge, goals and risk appetite well before investing. The internet is filled with ways how you can invest easily via online stock market, mobile apps and digital tools and also get real time updates on market’s price fluctuations, you can also get advice from experts and stock watch list. Now is the best time to invest than ever and with correct knowledge and patience you can get the most profit out of it.

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