There are enough books and articles relevant to success in the stock market. Along with these a new investor should learn certain concepts before making an investment. Among them six important factors one should understand and workout first before going to invest in the market. These are-
- Planning is a must
It is very important to take some time to make a list and set investment goals along with a timeline.
- Long-term time horizon
The investment will result better if it is made for a longer period of time. Eventually, the risk associated with the equity market starts getting diminished over a longer-term.
- Keep your distance from rumours
Stay away from market rumours, hearsay and tips. Besides, do your own research and consult with an expert who has both practical and academic knowledge on investment.
- Control your emotions
Greed, fear, anger, and guilt can influence negatively on your profits. It is wise to make rational decisions based on facts and analyses.
- Do not try to beat the market
Beating the market is a ruse of loss. On the contrary, you should try to select a fundamentally sound company with credible management practices to invest for a long-term.
- Always follow-up
Monitor economy, industry, market, and investments regularly. Try to stick to your investing approach and remember not to lose track of your goal. Keep an open mind.
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