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4 Stock Market Tips To Become Rich

IndianMoney.com Research Team | Updated On Friday, March 09,2018, 11:51 AM
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4 Stock Market Tips To Become Rich

 

You want to make quick money and friends have suggested you invest in stocks. Making money in stocks is not easy. If you invest in the stock market blindly, without understanding the risks involved, you could lose a lot of money.

Investing in stocks is for the long term. If you want money in a hurry, its best to stay away from stocks. Investing in stocks is all about patience and sticking with your investment. Just as a plant takes time to grow into a tree, your stocks need time to give solid returns.

Take a look at 4 stock market tips to become rich. Want to know more on investment planning? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice / education to ensure that you are not mis-guided while buying any kind of financial products.

 

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4 Stock Market Tips To Become Rich

 

You must have read about stocks which have given huge returns. Avanti Feeds, a manufacturer of high quality shrimp feed and exporter of frozen shrimp has given investors massive returns. An investment of Rs 50,000 about 10 years ago, would now be Rs 1.64 Crores.

If you had invested Rs 10,000 in Bajaj Finance in 2009, it would now be worth Rs 39 Lakhs. What do you notice?

The stocks of Avanti Feeds and Bajaj Finance took 10 years and 8 years to give massive returns. So stay invested in stocks for the long term.

 

1. Chase companies which give value

 

Heard this great saying by Oscar Wilde, "Nowadays people know the price of everything and the value of nothing."

Its value you must chase in stocks. Check the prospects of the Company.

 

  • Are its products sustainable?
  • Can the company implement  technological innovations?

 

A Company might have cutting-edge technology, protection through patents, brands and licenses or the company offers a product or a service which is unique and has lots of demand and other companies cannot easily match it. This company enjoys the protection of an economic moat.

Pick stocks of Companies which have the protection of an economic moat.

 

SEE ALSO: Smart tips to pick stocks

 

2. See if the Company has a strong past

 

The future of a Company is built on a strong past. A strong past is like the foundation of a house. This Company can withstand volatility in the stock market. Pick stocks of Companies which have low debt and a very credible management.

Invest in stocks of Companies whose ability you trust.

 

3. Find a Company worth investing

 

It's difficult to find a rare pearl from the ocean. In much the same way, finding a Company worth investing is difficult, but the efforts are worth it.

You have to buy stocks of the right Company at the right price.

 

  • Before making an investment in stocks of a Company which you think are right for you, compare its price with peers. (Companies in the same line of business). This will tell if you are paying too much for a stock.
  • Take a look at the P/E Ratio (Price to Earnings ratio) which is the ratio of the Company's current share price to its earnings per share. P/E tells you how much investors are willing to pay for each rupee of a company's earnings.

 

An investment in stocks with high P/E Ratio might not be value for money.

 

SEE ALSO: 3 Reasons to invest in dividend paying stocks

 

4. Absorb losses quickly

 

An investment in stocks involves emotions. You prefer to stay invested in companies, even if you are making losses. You refuse to admit a mistake. You will sit on losses hoping that the company does well. Hope is an emotion that you must master, if you want to be a good investor in stocks. Accept your mistakes and absorb losses quickly.

Absorbing losses shows how good an investor you are.

Follow these 4 stock market tips and bring out the investor in you. In stock market investments you don't always win. You learn along the way. Be an investor and not a trader if you want to see profits. Be Wise, Get Rich.

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IndianMoney.com Research Team

The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.

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