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10 Things Every New Stock Investor Needs To Know!
How to Overcome the Fear of Investing in Stock Mar | November 14

10 Things Every New Stock Investor Needs To Know!

Picking up the right stocks for you can be a daunting task, especially if you are a new stock investor. Being the first time in the stock market, the individual may end up picking wrong stocks. Stock markets are definitely not everyone’s cup of tea. Thus, it becomes important that the new stock investor does his homework well before putting his money in stock markets of India.

In this article, we shall have a look at 10 things that a new stock investor should know or keep in mind while investing in the markets.

Basics That a New Investor Should Know

The points to be taken into consideration by a new investor are as follows:

1.       Buy Low, Sell High

The basic rule in the stock market is to purchase the shares at a low price and sell them at a higher price. It sounds like an easy task but it is not. Most of the times the traders and investors are caught in wrong positions and eventually making a loss.

 

2.       Find Details About Company

Before investing in the markets, the new investor should find the basic details about the company. The factors that need to be considered before investing include profitability of the company, future guidance, EPS, debt, etc.

 

3.       Anything Can Happen

Nothing can be predicted with full surety about the stock markets. The beauty of stock markets is its uncertainty. The sudden trend reversal is something that traps many traders. So one should always be aware and never be overconfident in the stock markets.

 

4.       Long Term is Safer Bet

Stock markets are considered safe for long-term investment. Daily movements may show volatility and fluctuations. Nevertheless, to make good wealth one should make an investment for a longer period. Historically, long-term investments have fetched higher returns in comparison to short-term investment. In addition, long-term investments in the stock market have tax benefits as well.

 

5.       Right Stockbroker

A new investor should select his stockbroker wisely. Before selecting any stockbroker, the investor should check the brokerage rate and facilities provided. Apart from the basic criteria, the new investor may also check if the broker is willing to help him with his investments decisions. Also, the new investor should opt for only those services that will be required.

 

6.       Dividends

The new investor should look for investing in companies that give regular dividends. If the investment is long-term in nature, the new investor shall have continuous earnings in the form of dividends. In addition, companies that offer rich dividends are most profitable units.

 

7.       Stock Price Evaluation

The new investor should not evaluate whether the stock is expensive or not by looking at its price. For example, if the price of the stock is Rs. 20, it does not mean it is cheap. Similarly, if the price of a stock is Rs. 2000, it does not mean it is expensive. To know the right price of any stock, its fundamentals need to be evaluated.

 

8.       Start Small

It is important that a new investor starts with small investments. Since it is the learning phase, small investments will make him ready for big investments. Once an investor is confident of a small investment in the stock, he gets the decision-making ability to invest big amount.

 

9.       Don’t be Emotional

Stock markets are unpredictable. Investor’s emotions have no place here. Never be greedy and book the profits timely. Always keep a stop loss. The investors should avoid euphoria, excitement and excess optimism. With that control over panic, fear, denial and anxiety are important. Keeping a lid on emotions will make the stock market a better place for new investors.

 

10.   Keep Record

The stockbroker sends contract notes for the day transactions. Ever after that, the investor should maintain his own record. This will not only give him the idea of the profit and loss but also help him to tally the records in case of any error from stockbroker’s end.

 

About Us

Indira Trade provides various financial services. We guide the new investors towards the right path in the stock market. We ensure that they are learning constantly and making good returns. This helps in their confidence building. Open demat account with us and enjoy our services. For any query or information, you can reach us via call or email.

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