We all know that the Indian stock market is growing at a high phase now. And who doesn’t want to take an advantage of it? Almost all of us want to gain from it. But when we do trading in the stock market, oftentimes, we get confused about should we buy the shares or sell them now or should hold them.
So, here we have come up with some strategies that can help you:
Even if the stock market is booming now in India, you can’t blindly invest in any stock. Proper analysis and research have to be done before going for the investment. You should know all the important information regarding the company like management, industry in which it operates, the expected growth of the industry, etc.
Say no to speculation:
Investments can give you higher returns if you are doing it for the long run. This statement applies to the stock market too. You should try to avoid speculation. “Speculation means when an investor buys and sells the shares with the mere intention of getting the benefit from changing prices.” This strategy can’t go long.
Some limitations are good:
You can always decide at what price you can buy and at what price you will go for the sale. Stop-loss is a good strategy that can save you from future losses. “The process of gradually shifting the stop-losses in sync with the movement in the stock price is called trailing stop-loss”.
Stability is always good:
You should try to invest in such stocks that have paid more or less consistently. The fundamentally strong companies can survive in the long run. Companies which are having less debt and have more liquidity, generally pay dividends consistently. They can be less volatile and more stable in the market.
Investing in these kinds of companies can prove to be a great strategy.
Avoid herd mentality:
Many times we tend to attract towards the stocks which are praised by our near and dear ones. We almost end up investing in the same stocks in which they have invested. Remember, this might not be a good thing. As people have different perceptions, opinions, and financial goals. You should see which stock can prove to be good for you in the future. As long as you feel the company is fundamentally strong and can grow in the future, you can go for it.
Just because now the stock market is booming, it doesn’t mean you invest all of your money into it. Diversification is always good. Moreover, you should avoid borrowing money from someone else and then investing in the stock market.