Stock investments have always attracted investors. It wouldn’t be an exaggeration to say that anyone who plans to make an investment considers this option for sure. While some make huge profit from stock investments and continue to invest in it others quit early due to losses incurred. Not everyone can pull off profit especially early on and thus it is only wise to take calculated risk.
How Much to Invest in Stocks First Time?
If you are investing in stocks for the first time, it is suggested to keep the amount small. This is firstly because you are just starting with it and do not know exactly how this trade works and secondly because the stock market is highly volatile. Now, the question arises as to how much is too much? How much should you invest in the trade as a beginner? Well, the answer is simple. It depends on how much amount you can put to risk. The amount you can spare easily without impacting your budget is the amount you should go for. So, the amount may vary from person to person. However, having said that we would like to mention that even if you can spare a big amount it is recommended to begin with a smaller portion and increase it as you gain knowledge and experience in the field. Let us now look at few other ways to make your stock investment experience more systematic and smooth.
Do’s and Don’ts for Beginners
Here are some of the do’s and don’ts for those of you who have just ventured into stock trade:
Let us begin with the do’s:
It is essential to gain adequate knowledge about the working of the stock market before you dive into the trade. Research extensively about the stock market, brokers and find out about the stocks you should invest in. You will get a lot of information about it online. Besides, it is also a good idea to get in touch with your friends and colleagues who have a first-hand experience in stock investment. This will give a deeper insight into the working of the stock market and help you take better investment decisions.
Find out About the Cost Involved
You don’t just purchase stocks and begin to make profit. There are a lot of other costs involved. You require opening stock trading account and demat account and need to pay the account opening and maintenance charges for the same. Brokerage charges and various other costs are also involved in stock trading. You must find out about all the costs involved and make sure you can squeeze in as much amount before you invest in stocks.
Invest in Different Stocks
Do not make the mistake of investing the entire amount in stocks from a single organization. Diversify your investment by purchasing stocks from different companies after doing a thorough research about their likely performance.
Don’t Get Carried Away by Short Term Gains
You may get many opportunities to make short term gains. You may go for it once or twice but make sure you don’t make it a habit to stick to this pattern. Always look for long term profit if you really want to earn good money out of this investment.
Don’t Copy Others
Set your own investment intervals and choose your investment amount based on your risk-taking capacity and considering your priorities. Do not just blindly follow trading scheme and strategies followed by your friends or colleagues.
Don’t Take Impulsive Decisions
Making impulsive decisions based on your previous highs is a big no. You must always research well, consult your stock broker and keep a watchful eye on the market patterns in order to come up to a sound investment decision. Never invest hastily in the stocks.
It is natural to feel hesitant and anxious when you start with anything new especially where the finances are involved. But if you are inclined towards trying stock investment then don’t hold back. People are making huge profits by investing in stocks. The key is to begin slowly and move steadily after doing all your homework.