I heard from most of the non-investors that it is easy to make investments in the stock market, but they do not do that because they think the stock market is similar as the gambling (Both are different from each other and I already clarified you this in my previous article based on the myths of the stock market). If you are new in the stock market maybe you also think the same, all it is because you are not into the market yet, but in reality, it is a tough task and how tough it is, you will get it once you entered into the market (you can also clarify your thoughts from here Epic Research). If you are really excited to enter into the market you have to prepare for it first, and how you do that I am telling it to you. For the preparation, you should ask yourself these three questions such are :
Why do you want to invest in the stock market, for money? Obviously, you are, but is it the only reason to invest in? Do you know that you also have to give so much to earn more I am not talking about the amount of money that you going to invest but along with the money it also requires your learning, your patience and the most precious your time? I don’t mean that investment is the wastage of the time, but it is really good to invest in just because when you invest in some company, it helps the company in its growth. So be prepared to invest your time too. If you ask the best thing for investments most of the people would suggest you to do real estate investments either it is good and have no risk but you need a lot of money to invest in the real estate but in case of the stock market you can invest very few amounts you are able to.
What stocks you have to invest in? If you want to enter into the market obviously you have to know how to enter. Do you have to know what stocks you are going to buy for entry? There are some options of stocks you can select it based on your analysis and risk bearing factors, such are: Equity, Commodity, Forex, Index Futures, Options, and Futures ( Here I am giving you a quick intro of all of these but I will define and simplifies each of its in details in my later articles one by one)
In equity, if you invest Rs 1 you can take the leverage of 1. Is it tough to understand? Okay, you can understand it as in equity if you invest Rs 1 you can take the things which value is one so here leverage means that value, get it? Same as In futures if you invest Rs 1 you can take the leverage of 5. In Index futures, if you invest Rs 1 you can take the leverage of 10. In commodity, if you invest Rs 1 you can take the leverage of 20. In options, if you invest Rs 1 you can take the leverage of 50. And if you invest Rs 1 you can take the leverage of 400 in Forex. So higher the profit you want higher the risk you have. Select Stocks as per your temperament, and disciplines.
The last one is when to invest in the stock market? Yes, you read it correctly, time is also an important factor when you entered the market. And generally, before the budget is the best time to invest in the stock market. Do you remember when our previous government passed the budget yet before, it was the best time for the investors as the market was high? After that, the market went down and then increases at a slow rate. How an Indian market run is based on the two factors first is the growth of the company and the second one is the psychology of investors. If psychology of the people said that the market goes up it definitely goes up. In India, this psychology drives the market.
Planning for your investment? Don’t wait, go for it. Make plans based on the above three questions. Keep in mind it is just to do homework before as well as after the investments you made in the stock market.
About the Author :
Hi everyone, I am a financial analyst in Epic Research. I like to read and write about the stock market. Hope the above content is readable and easy to understand for you.