Let’s face it, the most intimidating part of getting into the market is the fear of making mistakes that could cost us. This hesitancy stems from the fact that many beginners (early investors in their early 20s and late bloomers way into their late 40s) don’t know where to start, as the stock market can seem like an ocean when they look at it from their comfortable island sustained by their stable income. While it is true that investing and finance might seem like a tough task, once you take the first step to get into it, it’s smooth sailing once you get the hang of the tide and wind of the market. There’s always a bunch of questions running in a learner’s mind about what the basic thumb rules are that they must follow to get a firm grip on the subject. That’s what we’ll be looking into here, easy and time-tested ways to make sure that the money you put in brings you the results you are expecting:

Do’s of Stock Market Investing

Let’s start with the good, the most important rules every beginner must be aware of before setting foot:

Learn the subject

The first and foremost rule that every individual who is getting ready to invest must follow. The market is a study, and it keeps changing. In order for you to stay on top of it and stay invested (no pun intended), you must be ready to put in the time to learn the market. For those who might think this could be a lot, it isn’t. You don’t have to get yourself enrolled in a complicated degree to know the basics. Self-learning is best and you can learn it at your own pace and comfort. Rome wasn’t built in a day after all. Here are a few apps that will assist you in learning about the stock market.

Start early and small

It definitely doesn’t hurt to start early. Starting early gives the investor the convenience of having time on their side. You can give yourself the time to do your own research and take a cautious approach to the start of your investments. One other essential factor that beginners must accept is that they must invest a small amount at the beginning. Along with starting early, this is another safety net that keeps a window open for you to recover if you make any losses in the early stages. This is another safety net, along with starting early, as it keeps a window open for you to recover if you make any losses in the early stages. With all that being said, you could be in any phase of your life where you have decided to invest. Give yourself a pat on the back; it’s better late than never!

Be consistent and thorough with your research

The main reason why we come across many people who are not getting the returns they want from their funds is that they don’t do their research. The research comes first before investing. This rule is followed by seasoned, successful investors, and that is the secret to their success. Take the time to go through the company’s fundamentals, financial statements, risks involved, management, the sectors in which it is involved, and more. It always pays to know what we are willing to put our hard-earned funds into. 

Set a goal and keep limits

Your friend might be getting great returns from a stock he invested in five years ago, and you feel tempted to jump on the bandwagon. You want to empty your Fixed Deposit you have been saving up on the same stock. This is a recipe for disaster. What works for your friend or your boss might not work for you. The financial status is different, the fluctuation of the market is always changing, and the investment goals vary. You should stick to setting realistic goals of your own as a priority. Take your income and commitments into consideration and always set aside funds that can be spared from your basic needs. This ensures that you are not dependent on these investments for your survival. 

Don’ts of Stock Market Investing

Now that we’ve covered the sweet part of investing, it’s time to cover the not-so-sweet part. Every coin has two sides, so let’s take a look:

Do not Gamble

Everyone might have come across at least one person in their lives who comes by and claims that investments are gambling. Let’s set the record straight, Investing is not gambling. Write it down in your diary, and make a poster out of it if required. There is a stark difference between betting money for the thrill and making a calculated approach to make it grow. Early investors should be clear about this and never look at it as a sure-shot way to instant wealth. Remember, it takes time for a fruit to grow. The more time it takes, the sweeter the fruit will be. There are no shortcuts when it comes to the Stock market.

Getting bit by the overtrading bug

It can be easy to indulge in overtrading, especially when you have started seeing some profits. This is basic human nature, as we try to make the most out of a situation when it is positive. Reel in the temptation to do this. This could put you in a position where you have to put your funds in a risky fund or stock with the promise of getting more profits. From a trading point of view, this is not ideal as you get charged with a brokerage for each trade. Take your time, and make trades only when it is necessary and minimized.

Don’t go for stray tips and don’t follow the herd, going by the news

This is an obvious one. The friend we talked about earlier would be willing to share a tip or two with you to help you get the same returns. This can seem harmless on the surface, but this can put you in a spot if you are unable to get the same returns, or worse, make a loss. While having discussions about investing ideas and methods can certainly be helpful, searching for free tips isn’t going to produce the result you expect. You can be pressured to follow the crowd, but nothing beats the confidence and comfort of making your own decisions. That makes your reward even sweeter.

Also Read: How to Invest in the Stock Market for Beginners in India: Step by Step Guidance

FAQ

That’s it. These are the basic points that beginners should be aware of before they start their stock market journey. As with any good learner, you should look forward to learning more as you start your investing journey. We’ve got you covered on that front. You can always get back to our page for more tips and insights into investments and stocks. Happy investing!

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