Things to know before Diving into Share Market

If you are thinking of investments that could beat inflation and also give you good returns, one option might be to start investing in the stock market. If you have decided to do the same and go for it all by yourself, it’s not a bad idea. The stock market, when properly understood, can help you make a lot of money, but you can also lose all your money if you are tempted to invest randomly without knowing the nitty-gritty of the market.
Therefore, there are a few things you must know before you dive into the share market. Here they go:

  • Never jump blindly into stock markets
  • Stock market is not a money-making machine
  • Educate yourself, handle basics first
  • Invest only your surplus funds
  • Avoid Leverage
  • Avoid herd mentality
  • Diversify but refrain from over-diversification
  • Don’t try to time the market, follow a disciplined investment approach
  • Don’t let emotions impact your investment
  • Have realistic expectations
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The choice and final decision to pick the right investment among the plentiful options is largely dependent on the possible exposures to risk, expectancies of a definitive return, availability of funds, sources of income, liquidity of the investment instrument and the time period for which the investment is being made. Traditional investors do consider such factors before taking their final call to invest in a stock, fund or any other tradable security. The conventional form of investing doesn’t differentiate on the nature of business, the vision of the enterprise and the short-term goals and objectives of a firm.To understand how to invest, one must know where he/she can invest, as different investment strategies involve different methods of investing.

Hi Tarun,

Very good info suggested for beginners of share marketing investment. It’s a clear explanation of what are the steps we know before invest in the share market.