Stock market investing advice
These days? people are moving more towards stock investment than opening new businesses. Reason being people find it to be an easy way to earn better, because in this business full time presence is not required and still better returns can be earned just by buying and selling of stocks in the market at the right time. Due to increasing interest of the people in stock market, the misconceptions, misperceptions and misguidance has taken place in the minds of the people.
The first big misconception is that everyone earns from stock investment. This is not the truth every time. Many people today have their money stocked in the stock market and they can?t take them out because they are not ready to declare big losses. Secondly, the misperceptions between the people are that costly stocks give better returns. But this is again not true every time, many stocks may show big slides during the intra day trade, but in the end of the year you will find them near that amount which a normal bank FD would have given the amount as interest. And lastly but not the least one. The misguidance by the newborn stock traders has created a big problem between the people. They make big claims to the people and when a person face a loss then at time you will not even find the trace of them.
Recommendation to the general public
Due to increasing trend towards stock investing, a recommendation to the general public is the need of the hour. In this article, efforts are made to decrease the beautiful but lying fog, by increasing the light of truth and ground reality. Mostly people are seen to be taking the investment decision in the stock market either subjectively or objectively. Both the subjective and objective outlook toward investing is stated below. Its up to the people to understand and evaluate the best method used before making investment decision in the stock market.
A. Subjective outlook toward investing.
B. Objective or logical outlook toward investing.
A. Subjective outlook toward investing.
Thoughts and advises are what we get free these days. They may be related to admission of the kids, going to a place for holidays, or even investing in stock market. People carelessly gives advises to others regarding selection of their personal favorite stock. In case the stock price moves up they start giving more and more suggestions. And in case the price of the stock falls, then they don?t show their face to the person whom they once gave some suggestion. So it should be understood clearly by the people who like to gives suggestions to others that even if they are expert or have a long time experience they should keep quiet or give just their thought and then leave all the rest to the investor.
The big reason for stopping people from giving there advises regarding stock purchase and sale is due to the unknown movement of market. As the market moves at its own pace and hardly any single person can control it. Big players of the market even have to face big losses at such time. The amount of their loss equals our yearly income. So it is advised to the people to stay away from giving such suggestions to the people regarding stocks, as they are most unpredictable and most trustless things on earth.
The two most common phrases heard these days are,
1. Stock investments are changing life of the person.
2. Experienced are earning heavier profits.
But the reality is that stock investment are changing lives of the people both ways i. e. making life good or it may be making life even worst. Secondly the experienced are also among the losers many a times. These two reality statements can change the misperceptions in the minds of the people regarding stock investments.
1. Changing lives both ways.
When we hear people saying that Stock trading has changed the life of a person and made him/her a millionaire then at that time we are not made familiar with those people who has lost everything due to stock investment. Thus change of lives here means that a person can even earn huge profits from stock investing or even can loose all the wealth earned through out the lifetime. Many people loose their homes, bank balances, and the rest of the wealth just due to stock trading. Thus it is just the matter of chance when a person earns huge profits, and on the other hand years of experience can?t stop people from having losses in the market. Even the experienced people also have to face losses at sometimes.
2. Unaffected experienced people.
Although the people with a long experience understand the fact that while stock trading the chances of losses and profits are equal and like fifty-fifty percent. So they play in the market, as they are mentally ready to meet the losses and the immediate gain of wealth both together. They use the stop loss method through which the loss amount can be reduced. But the fact remains the same that they also face losses.
Therefore it can be concluded here that their is no hard and fast method of earning wealth from stock trading, just that long experience and low level of greediness can help a person to earn safely and reduce chances of bigger losses.
B. Objective or logical outlook towards investing.
An objective or logical outlook towards investing is by taking out some time and doing some evaluation and research work for the investment. As your investing are of the hard-earned money, so they deserve to be given some time, so as to decrease the chances of losses. The following eight-step method can be used for a proper and logical selection procedure of the stock, which can give better returns.
1. Observe the best five stocks out of the many, which you like.
2. Note the daily changing rates in the market.
3. Always keep an eye on the result calendar and board meeting decisions of the company.
4. Clarify the debts and equity ratio of the company and in case debts are more than reject the company.
5. Look for the time at which the stock price moves more upwards and more downwards and why.
6. Start making investment up to forty percent and then observe the market price of the definite stock.
7. Make the rest of the sixty- percent investment only at the time of a big dip. Reason being that dips are not far away from market for long. Their coming is necessary and natural and does come often.
8. Control your greed.
In this way a person can ensure better returns from the stock market and along with that decreasing the chances of losses.
Conclusion
Both the subjective and objective methods of selecting the stock for investment are discussed above. The need is just that the people should recognize the benefits of choosing stock for investment by objective and logical method other than depending on the thoughts and misguidance of others.
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