Investing and sustaining in the share market is not any easy task. Sooner or later everyone needs guidance and mentorship in order to ensure their money is not going in vain. In this article, we will focus on share market investment tips from experts of the market. We will explain the tips so that it is easy to understand and implement in real life scenarios. Let’s have a look at our pick on top 8 share market investment tips from experts and how you can connect this with the share market.
1. Know Your Bucket
Before investing in any company, know the ins and outs of it. Try to get the detailed information that is essential to determine the share market condition of the particular organization. Warren Buffet is one of the iconic figures in the world of investment and stock market. This business tycoon is often quoted for his sheer brilliance on investment decisions.
“Price is what you pay; value is what you get.’ Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”
First and foremost share market investment tips before investing is knowing where you are investing. What is the company? What is their service? Are they delivering quality services or products? Get the answers to all these questions and evaluate their performance. Forecast their future performance before taking the decision of investing.
2. Patience is Precious
Investment in the share market is not a sprint. It is a marathon. The journey will be full of ups and downs and the key is to have patience through every stage of the transition. David Tepper is a businessman and hedge fund manager based in America. He is also quite popular for his involvement in Charlotte FC.
“This company looks cheap, that company looks cheap, but the overall economy could completely screw it up. The key is to wait. Sometimes the hardest thing to do is to do nothing.”
Overthinking or reacting fast can sometimes cost you a fortune that is why when it starts to get cloudy, sometimes it is best to wait. Stock market is a very unpredictable place where the condition of a company can change in a mere second. Same goes for the investors too. Thus, when it comes to share market investment tips for an investor, he/she must be really cautious at all times and try to understand the situation and learn to actually keep patience and do nothing in haste.
3. Risk is a Part of The Process
Taking risk is a part and parcel of the share market. Every decision you make in the market is subject to risk. Some of the risks might be higher than the other but risk is present in almost every decision. The founder of Vanguard Group, John (Jack) Bogle has left an astonishing legacy behind. As the first ever creator of the index fund, he always knew the significance of taking a risk when it is worth it.
“If you have trouble imagining a 20% loss in the stock market, you shouldn’t be in stocks.”
–John (Jack) Bogle
It’s nothing new that the stock market is a very unpredictable place but it’s not for the weak hearted. There might be rumors that the price of the company you invested in might go down or hit the jackpot but you always have to be prepared for the worst or else you might lose all hope or suffer a lot. You must remember that the chances of facing a huge loss is quite natural but you must be prepared to face the situation at all cost. This is one of the most important share market investment tips.
4. Fixate on Your Goal
Setting a goal is a very significant investment tip for beginners. If you are starting your journey as an investor, you need to jot down the goals you are planning to achieve. This will amplify your chance of achieving your goal easily.
“One thing that could help would be to write down the reason you are buying a stock before your purchase. Write down “I am buying Microsoft at $300 billion because…” Force yourself to write this down. It clarifies your mind and discipline.”
Setting a goal is a very important share market investment tip for beginners. Especially for the investors who play with numbers and always have to forecast the situation and prepare their next move. So, it’s really important to write things down that way you won’t lose focus and you will be much more confident in your decisions.
5. Understand Market Trend
Do not jump on the bandwagon and purchase stocks when everyone else is purchasing them. Rather stay ahead of the market by understanding the trend.
“Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well.”
To go ahead of everyone you have to do something that no one else has done. When it comes to the share market, you have to know when your time is and what you should do. You have to understand the situation and capitalize on the situation when everyone is not ready and make the best of the situation.
6. Keep an Eye on the Performance not the Price
Often decisions are taken in haste considering the price of a particular stock. Focusing only on the price might not turn out to be always the right approach of making the decision. Therefore, taking decisions based on price can take you towards a wrong trajectory. Peter Lynch is an American investor and mutual fund manager. Through his excellent skill and knowhow of the market he made the S & P 500 stock market index the best performing mutual fund in the world.
‘‘I think you have to learn that there’s a company behind every stock, and that there’s only one real reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies.”
This is a very important share market investment tip to understand. Stock prices just don’t go up for a reason rather their performance depends on it. That is why you have to study your company properly and then by judging their performance and quality you must invest your money.
7. Go with the Flow
Share market is very dynamic. The condition of the market is always fluctuating. Sometimes the trend is upward and sometimes it is low. In some situations, the market moves towards a certain direction as it demands to go with the flow. In situations like that, sometimes it is better to take decisions following the flow of the market. There is a famous quotation of Martin Zweig that focuses on the stock market’s trend and the necessity of following the trend.
“Big money is made in the stock market by being on the right side of the major moves. The idea is to get in harmony with the market. It’s suicidal to fight trends. They have a higher probability of continuing than not.”
Stock market trends are a matter of concern for beginners in the market. Sometimes it confuses you and makes you jump into conclusions ending in a bad decision. Analyze the market and understand the market condition and go with the flow sometimes because fighting trends might cost you a big time.
8. Long Term Focus
Stock market is not for the shortsighted. The chances of performing in the market depends on the amount of patience one has in them. Patience will keep you focused on the long term goal and do not take decisions for short term gain. Even though William Feather was not directly involved with the stock market, his experience as a publisher and journalist kept him updated about the stock market. His opinion on the stock market was from the point of view of an outsider. In that, there is a lesson for the ones who are already in the stock market.
“One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute.”
When someone buys a share he thinks he’s winning just like the guy who thinks he won when he sold those shares. A strong belief that one is always a winner might cause you in the long run. Instead of taking any decision based on short term gain might harm on the long term gain. As a result, it is recommended to now focus on short term gain and get off track. Rather stay focused on the long term goal and keep on trying to reach their goal sooner or later.
These are the top eight share market investment tips from the legends who have paved their way to greatness. Taking their advice into account can bring significant amount of value in your investment success.
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