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This New Year Take A Step Forward To Become A Billionaire!

Jan-02-2019Blog by – Mr. Ashish AjmeraRead Time: 4 Min.Word Count: 830
132This New Year Take A Step Forward To Become A Billionaire!
Stock market investing is one of the best means to achieve your long-term financial goals. An efficient approach towards stocks can make you rich and increase your wealth multifold over a period of time. However, you need to be patient and disciplined and willing to learn the basic investing dynamics.  While it is true that stock investing is a fairly complex activity, some of the most important habits of successful equity investors are simple to understand and put in practice. Here is a look at six such guidelines which can prove very useful for investing success.

Start Investing At Early Stage: This is one of the most important points in your investing journey. Remember that amount you are putting in various investments does not really matter when you are young and are just starting out in your career. However, the time factor i.e. the compounding of wealth achieved over the years will make sure that however small an amount you start with, the resultant gains would amplify into a large corpus of funds. Also keep in mind that apart from the pure price appreciation, corporate actions like dividends and bonuses would also enhance the value of your stock holdings over a period of time.

Understand How Financial Markets Work: Remember that the financial markets are closely linked to the broad economy and trends in various sectors. Also understand the concept of value and do not try to enter in stocks just because you feel that they are looking attractive after a steep correction. Most of the good stock brokers in India tend to provide basic information about investing and economy in a very simple manner. There are other investing websites too which offer plenty of investing knowledge that can help you learn how the financial markets work.

Stay On Top Of Your Investments: Always ensure that you know what is happening to your stocks and be aware of the changes in the broad economy, political space as well as the global newsflow in general. The rise of online stock trading India in recent years has made it very easy for investors to keep a check on their portfolios through online trading platforms/apps etc. Such utilities also provide plenty of investment analysis, corporate updates and economic research etc.

Be Willing To Take Measured Risks: Risk and return are two sides of the same coin. To become a successful stock investor, it is important to plan the investment before you actually act upon it. Be clear about the structure of the market and the stock you plan to invest in. As an efficient investor, you must know where your comfort level is and be able to measure the relative risk of a particular stock investment. Normally, stocks of established, blue-chip companies have a fairly stable stock price. These companies tend to pay dividends and would thus offer steady investment returns. If you choose to invest in smaller companies without a proper check, the returns could be much more volatile and might also erode the value of your funds.

Be Calm, Composed And Disciplined: Remember that the goodwill of a company is built over years and that forms the basis of the growth achieved. Strong sales growth, well known brands and future expansion plans also reflect upon management’s credibility and build trust upon company’s ability. Investing in such companies for a long period of time normally tends to be attractive. Also ensure that you analyze a stock by studying the historical financial statements, technical patterns and decide about the time to buy or sell. Be willing to be patient in times of stress when there is an across the board drop in markets or when there is unusually high volatility due to external factors like policy changes or economic unrest etc.

Diversify your portfolio: Remember that there is no free lunch in investing and if you are interested in increasing your potential returns, you will have to accept more risk. However, this is where diversification comes in the picture. A well diversified stock portfolio lets you improve the potential trade-off between risk and reward. Well crafted and efficiently managed portfolios made up of stocks belonging to various sectors and belonging to various market capitalizations can help control risk in a great manner. This is why it is said that never put all your eggs in one basket.

Conclusion:

The stock market is an entity that does not operate for a single individual but rather performs based on the emotions and responses from millions of investors. Therefore the stock price movement is subject to be extremely uncertain and volatile. One should analyze his strengths and weaknesses in terms of the ability to handle risks and control one’s emotions. Remember that it is not always about picking up winning stock ideas or hunting for the next big story in markets. Maintaining discipline and composed mind will ensure that your stock market investments amplify in a sizable manner over a long period of time.

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