Introduction
5 Things You Must Know About The Stock Market Today. Stock Markets is a financial building block of public listed companies where trade is carried out based on buying and selling of companies shares. In a nutshell stock market operates on the basis of market trust. Market trust is an important factor on which shares are bought and sold. For any investor entering the stock market he/she must understand the micro and macro environment of the company where they are investing.
You have create for yourself inroads to access the market condition because the markets each day change dramatically. Before opening an account with the broker make yourself aware that everyone in that market is a player and have their own vested interest, so if you lose they have no concern. Especially when it comes to Brokers. To help you make an informed decision on any given day you need to take a look at following 5 things.
Don’t Invest In a Company That’s Too Small To Survive
(Less than 50 employees & annual turnover under €10 million)
A small company is considered a high risk business, because they would have limited data to support their current market position. It is generally believed that you should always invest in a company that is less risky. In the beginning the businesses are fighting for their sustainability. So even if they win their battle of survival still this doesn’t put them in a position to generate profits that look good to you as an investor. A big investor Warren Buffet said that he use to invest in the businesses that were small but he use to meet its owner to find out why they are struggling. He only invest in in people not the business itself.5 Things You Must Know About The Stock Market Today in order to avoid this mistake
There is a popular phrase “higher the risk higher the return” So if you consider yourself as a person can access the market and speculate the growth of a new business that is small then you should take the risk. Otherwise it is risky to the extent that you will lose all your investment.
Tip : Always remember accessing the business by its small turnover and staff is not always right. All businesses start small and some become big companies. Always consider while investing this fact that we all start small.
Buy Low and Sell High
What will happen in the future is unpredictable, however as with most businesses who set their targets in advance and tend to believe that they will achieve. You as an investor must align with the vison of the company’s CEO. If you can believe in the vision of the company then an investment decision becomes easy. Once you align yourself with company’s vision then you must try to buy the stock when its price is the lowest. And selling it at a higher price. 5 Things You Must Know About The Stock Market Today will help you make informed decisions about buy and sell.
You need to predict that the best share price when it has dropped and that is ideal time to invest. At the time of Brixit Warren Buffet said that it is the best time to invest in UK market. So his prediction was right. So best time to by stock is when it is cheap. Once you make your way to stock market you need to be patiently follow the trend and buy when is lowest.
Buying low and selling high is a proven way to increase your profit. But taking decision at the right time is important. If you waited that to climb more up but instead it drops then there is a risk of losing money. Selling high means that you sell the stock at a higher price than what you paid for it. Buying low means that you pay less than what the stock is currently trading at.
Don’t Rush it
These 5 Things You Must Know About The Stock Market Today Will help you calm down your nerves and take better decisions.You can be tempted to buy a stock in a hurry but it’s better to be patient. It a financial decision so always project its impact in the long run. As an investor you might see some days as you are losing but always think positive. It has been seen that patient investors gain more than they lose. It is because they make rational decisions not impulsive decisions.
The stock market is as if you are in a market where a lot of goods are being sold and purchased. When someone buys it indicates that demand for that thing has increase and when someone sells it is seen as if the demand of the particular stock has dropped. So best way is to hold yourself and don’t rush it.
Don’t Invest In Anything That’s Too Risky
Investing in stocks is risky. The way you can gauge your risk is the percentage you of your total income that you are spending in stocks. So as a best practice always invest 20- 30 % not more than that. The more risky it becomes the more panic you will be. For any one stating new he/she should ask a question to him/herself that once I invest this amount should I have to withdraw them at any given point. If the answer is yes then you should decide not to invest. Based on these 5 Things You Must Know About The Stock Market Today you can be in better situation from those who learned the hard way.
Because when you are force to take your money out at a given time then it will tend to bring in that panic circumstance that needs to be avoided at any cost. Never invest browed Money. The more debt you add to this market the more panic you are going to get in future. Always invest small amount and aim to maximize within your constraints.
Never position yourself to failure, by taking a gamble of all in. So a smart investor is always prudent. So always think that you are not the only one seeing that opportunity. A lot of times people rely on the advice of the broker as they think that the know market well. The reality is that broker is not investing you are investing and your financial good or bad position will do nothing to him.
Don’t keep all your eggs in the same basket
Often times we you will think that you are better off buying only one company’s shares and pose you less risk. However it is the other way around. You tend to expose yourself to much more risk. Consider yourself owning a restaurant. This restaurant of yours is making more profits but one day a flood came and you lost your restaurant. What will happen then? You will lose everything. In stock market flood is symbolic to bankruptcy. By avoiding this mistake you rule out these 5 Things You Must Know About The Stock Market Today and portfolio managers do the same as well. They always create a diversified portfolio.
Your Preference should be to invest small proportions in different companies or sectors. This will diversify your risk. The lesser the risk the better it will be for you.
