Some truths about investing in the stock market
Investing in the stock market raises two opposite senses of the public. Some nasty stock deals and treats it as gambling while others like it intense. They may think that stock investment is a lottery with a prize.
These two views are characterized by a state of mind. If the stock market falls sharply, the hatred of the stock market will say loudly: I'm not telling you this is gambling?
On the contrary, if the market goes up for two weeks, then buying around will suddenly erupt.
But people can not stay away from stocks for a long time. The reason is that stock market returns on investment are always higher than the rate of return on fixed-income deposits. Investment in the stock market provides the ultimate strength to beat inflation.
The best way to earn money from a stock market investment is to evaluate your investment and return at a particular time. The most common mistake investors make when buying stocks is that they do not target specific returns. In addition, they do not assess the risk of investing in specific stocks.
It must be understood that investments in the stock market usually do not lead to monetary surprises. It has been found that, despite frequent falls, the stock market is still on the rise, and over time investors can get an average return of 15-20% per year.
It should be noted that 15% -20% of the average rate of return should not be rash. When they are allowed to compound, the return can be staggering.
The second prerequisite is that you should use the Stop Loss principle.
But if you want to get a 30% return in a year, you have to set a goal, rotate your investment three times a year, and fix a goal, earning each round your own portfolio. Take 10%, that is, when you enter or exit the market.
Again, you must set a stop limit. If you lose 10% of your investment, you must exit the share. If you set a similar limit on your loss, you will be protected from huge losses.
If you are a beginner to invest in the stock market, the best way to do this is through a simulated portfolio. Even if you do not set your profit target, you must set a stop-loss limit.
You must learn to build your portfolio based on how often you need revenue streams and capital returns. You must also determine the composition of your portfolio based on your age, your living conditions, your source of income, and your risk appetite.
It is always advisable to keep all the eggs in one basket along the old wisdom. In other words, you must learn to diversify your portfolio. It should also be noted that diversification should not be used for its own benefit. According to Warren Buffett, only when investors do not understand what they are doing when the need for a wide range of diversification.
Your broker may still be your guide to investing in stocks and stocks, but you must eventually try to build your own way in trading or investing. You have to learn to access your stock Stockbroker so access to the movement of the stock that tracks your prices, rather than relying on – signals to provide vBulletin®. Remember, this is your own money.