You want to be rich fast. There are so many things to buy and your money gets over in no time. You don’t know when your money comes and worse where it goes. What can you do in these troubled times?
Your friend has given you an excellent suggestion. Why not invest in the stock market? But there is a small problem. Investing in the stock market is a dangerous game. Your money could double in no time, or you could lose all your money. You are caught between two Emotions… Greed and Fear…..What should you do?
SEE ALSO: What is a Retirement Planning?
How can you play safe in the stock market? Is it possible to play safe or is it just a dream? Yes… It is possible for you to invest in stocks in a safe manner. You must invest in large cap stocks (stocks of reputed blue chip Companies), which are part of the stock market index. The most popular stock market index is the BSE Sensex and the CNX Nifty.
You need to start somewhere when you invest in the stock market. You also don’t want to lose your money. Investing in large cap stocks which are a part of the stock market index, is a safe way of playing in the stock market. Once you understand how the stock market works, you can diversify into more risky stocks.
See also: What is Primary Market?
This is a rule which you must never break. You earn an income, which is your salary and some other income like rental income. You must first set aside money for your expenses. You then save money for an emergency. If any money remains with you, then you must invest.
If you invest the money you need for your daily expenses in stocks, you may be forced to exit from the stock market, in bad times. The stock markets have fallen down and most of your stocks are at all time lows. But there is a bigger problem. You have to eat and your children have to go to school. You are forced to sell your stocks at heavy losses, to meet your expenses.
You have just received a bonus from your Company. You have a lot of money to invest in the stock market. You have also decided which stocks you want to invest. Now comes the big question? Should you invest all your money in the stocks you have decided to buy, at one go?
No, definitely not. You must split up your money into parts and slowly invest in stocks. If the stock market crashes, you will be able to purchase stocks of Companies with strong fundamentals, at a lesser price.
See Also: Stock Exchanges In India
You need to invest in the stock market with a bold approach. You win some… You lose some… What is your approach when you lose money in the stock markets? Do you blame stock market manipulators for your loss? The foolishness of the Company you have invested in? Do you blame yourself?
It is possible that you have not done your research and suffered a loss in the stock market. It is also possible that just as the stock market goes up…well, it goes down. You need to have a positive mindset and wait out the bad times.
So follow these tips and be a successful investor in the stock market.
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