‘Want to multiply all your investment?’
‘Want to make it millions in the stock market?’
We all understand that these two things are not that easy but simply not impossible. But a lot of investors tend to make the same mistake over and over again for common mistakes which can be easily avoided.
How many times have you come across an advertisement that can falsely promise you to make money in the stock market, based on loose expectations? When we are in the stock market, we are flummoxed with the idea of investing bigger and always the better. The idea of high returns can falter our wallets and the multiplication of money surely dazzles us.
But before you get into the stock market, you need to understand what you are truly getting into. You need to judiciously weigh out the pros and cons of the market before you thrive to make any sort of decision. The stock market has a high potential for everyone. Before you dabble onto the digits, there are some considerations you need to make. It will help you accordingly and make you steer clear of all the pitfalls in the mere future.
1. Investing with the Mindset of a Trader
How many times have the other traders asked you to trade with a calm mindset and to start as a beginner, as you are?
There are no free lunches present in the stock market. Especially if you are trying to double all your gains at the same time, you need to have a proper mindset. This is where the prime difference between a trader and investor becomes potent. For an investor, it is about to buy and invest and for a trader, it is all about trading and selling.
The basic difference to look out here in the long term perspective of the market. Expectations of all the quick gains might not fare well and it becomes indifferent between speculating and investing.
2.Sort Selling to make Profits
Short selling shares are always present at a higher price. In the hopes that buying them at a lower price might be provided extremely risky for the investors. Every investor has to understand that short term profits are only there for a fixed amount of time.
People believe that the idea of investment experts and the large stock market traders are always able to predict the market. The original fact is, the stock market is highly volatile, and as we all know about it. If we start and see them, we can see that most investors will make short bucks for the F&O trading units.
Most of the big names in the stock market are asked to make new branches in the upcountry side during the second half of 2007. But most of the investors happened to stumble because they bought the stocks since they were for a short term period but due to the high price fluctuation, their market fell.
3. Chasing Returns
Chasing returns while picking stocks from the market is the most common mistake that can be easily avoided. Returns are oftentimes not fixed.
Always remember the fact that the stock market is a cynical structure. They have their journey and a fair share of ups and downs. Most of the time, a person will invest their effort into an equity fund because it gives them high returns at a given period. Certainly landing up in the right kind of investment is still a dream for most traders out there.
Many times if a company fails in one or more of the factors which are present, they might have a high valuation in their stock.
To sum up, we can understand that every market has its ups and downs. There are some obvious pitfalls while you enter the stock market. While you are entering, you need to keep a long term perspective and conduct due intelligence while shortlisting the right kind of stock. Stay patient and enjoy the journey you are in! Make your time and make sure that it should be completely precious.