The Best Way to Invest in Stock Market
Whoa! The stock market is a wonderful place to make money. It has been proven time and again no other asset class can match equities in performance.
But wait: one dirty truth about this game is a majority of retail investors make nothing! Thousands flock to the markets in great hopes of building vast fortunes. They would be extremely lucky if they are left with their shirt intact.
Well, there are no strict formulae for success but only perfect recipes for disaster. Another disturbing reality is markets are mercilessly unforgiving for the ignorant. That’s it!
So, what would you do if you lack the requisite knowledge but still wish to make a profit?
If you are just starting out or are losing money every time you make a trade, read on then!
Below, with great consideration we have picked the best ways to invest in the stock market that we know won’t bring in millions but shall preserve your vital capital so that you could re-invest it again and again.
- Bid adieu to intra-day: Well, day trading is not for retail participants. But brokerages suggest otherwise. They provide low margin facility to make it attractive to investors. In the end only brokers gain. It is often next to impossible for ordinary folks to earn decently in day trading.
2. Say hello to long-term in cash: Buying in cash has its own advantages. One gets insulated from short-term volatility as well. Also, the odds of a good return increase multi-fold when shares are held for the long-term.
3. No F & O: Derivatives are leveraged instruments that are best handled by seasoned traders. Institutions use derivatives to hedge their cash positions. However, retail investors should avoid futures and options unless they have a thorough understanding. For, if caught on the wrong side of a trend large amount of capital could get wiped out in minutes.
4. Investing on news is definitely bad news: With media assaulting our lives 24/7 a lot of unwanted information keeps floating around that are nothing but a trap for ill-informed investors. In some cases, like a merger or takeover it could be genuine but to be safe one should stay away from stocks that move purely on news.
5. Timing the markets is a waste of time: To tell the truth, nobody has been able to predict the markets with cent percent accuracy. Unlike the weather the stock market is the working of human psychology of millions of investors. Thus, predicting is a tough job and is best left to the fortune-teller.