Investing in stocks is simple, but not easy. It requires passion, patience and discipline.
Every one wants to make money from stocks market, irrespective of the level of experience. Investing money is stocks market is simple, but earning profit from it requires passion, patience and discipline besides sound understanding of market and forces that drive the market.
Here are some strategies particulary meant for both beginners and proffessionals to inculcate in their daily life.
Do your homework
“If you do not study any company, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards,” said Peter Lynch, a globally-renowned fund manager.
One should have a thorough knowledge of the sector and company in which he is going to invest his money, then only he can earn high returns from stock market.
Choose Right Broker
Though their are tons of brokers present now a days claiming to be number 1, but you need to work on two things:
- Broker should be Discount Broker ( that will help you save extra 2-3 % on brokerage money)
- Now a days, though various brokers are offering similar brokerage rates, then you need to narrow down your search to the broker that offers best service (customer support, professional softwares and all)
In my case, in India it Zerodha in your case it may be some other broker.
Avoid herd mentality
Often you will hear people advicing you to keep an eye on CNBC and other market news channel and so on, but people mistakenly assume to follow their calls as well.
My simple advice is do your own research and don’t rely on your friends, relatives or CNBC or other news channel for BUY or SELL call to earn money from stocks market.
Invest with a disciplined approach
Investing a right amount at right time in right stock is must for having large profits. Alsways buy low and sell high, though you will not always be able to guess the exact low or exact high to be made by stocks.
Have a broad portfolio
By diversifying a portfolio across asset classes, you can help earn optimum returns with minimum risk. For example, invest in coompanies from varying sectors like finance, pharmaceuticals, Agricultural etc.
Never ever invest all your money in single stock or single sector.
Have realistic expectations
Never make hopes that stocks in which you are going to give 10x returns or so…be realistic and make some cash when ever you fee their is a right opportunity, and use that cash to buy other or same stocks at lower value.Stock market offers opportunity to enter and exit at regular intervals.
Invest only surplus funds
As a retail investor one should always try to invest money that is in excess, means money that will not be needed by you for atleast next 3 years.
Rigorous monitoring is a must
No doubt, once you have invested your money, you should keep an eye on it, but I would recommend not to keep a watch every minute of time, just reading newspaper related to that company or sector is more than enough, even if you do that on weekly basis.
How to earn money from stocks?
The ways mentioned above can motivate you to start investing in stocks. But the momentum of the market can be very confusing at times, without giving any scope for actionable strategy.
So I recommend to open your account with some broker and do some real time trading along with learning market indicators, fundamental analysis, technical analysis etc.
Zerodha is the perfect choice for that as it offers Tutorials as well.