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Wednesday, July 24, 2013

Stay Wise to Invest in Stock

Investment is of utmost important in anyone’s life. There are simple rules which can make a person financially strong in his life. Just earning is not enough. After the hard work and time spent, money is earned. The proper utilization of the money earned is mandatory. Every person allocates some part of his earning as savings. Here the question arises- Is that enough? If you save money then are you doing enough to make your future secure.
To tell you the answer is NO. Apart from savings, it is essential to invest the savings at proper place and at proper time. The proper investment of savings helps in growing your money. Investment should be done with great caution. A wise decision can make your money grow. But a wrong decision can deplete your capital. There are many options available for investments. Some of which are fixed deposits, real estate, jewellery and not to forget stock market.

Coming to risk and reward ratio, investments in fixed deposits are always safe but provides with low return. Gold jewellery is always a part of portfolio. It is the most traditional form of investment. The most aggressively used form of investments is investing in stock markets but how to invest in stocks. In stock market most of the times investment turns into speculation. Instead of making money, people lose their capital. So what is the right way to invest in stock market?

Stock market is the game of demand and supply. If demand is more than supply, price goes up and vice versa. The basic things to be kept in mind while investing in stock market are- • Decide the time period for which you want to invest. Are you a long term investor or a short term trader? • Keep the blue chips stocks in your portfolio. The blue chips companies provides with better returns. Moreover they keep on giving dividends time to time. • Stay invested for a wise period. Know what your targets are. Also keep strict stop loss on the stock bought. It is said that delivery should be bought and forgotten. NO. Even in long term investments stop loss should be maintained. • Opt for a right broker. He should be able to guide you in right stocks. The brokerage charged should be minimal. • Thus, these are the simple tips on how to invest in stocks. Trade with discipline. It is the key which ensures that your investment turns into profit or loss.

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