How to Invest in the Stock Market
If you decided to be an investor in the stock market, one question you must ask yourself why you want to invest, what is your expectation from the stock market? Why you taking a high-risk investing in stock market. The stock market is very volatile, lose seeing is a significant part of your investment. So fist of all have to know understand what makes the good investment, you can have to predict as you desire, but no one is abjectly knows what’s going to transpire, trading have some styles of investing as –
1. The swing trader – A swing trading position will go held for few days, months and years too, at a time in order to profit from price changes or swings, profit can be booked by buying or by short selling.
2. The Value Investing – As per market in over reacting to both good and bad news or humorous, due to that stocks are undervalued and this is the best to invest as per value. Therefore profit by buying the stocks when price is deflated.
3. Growth Investing – The investors choosing the company to invest which shows average growth, they focus on appreciation cost of capital. Growth investing is as value investing.
As per Expert views, few points are here to keep in mind to be a better investor:
• If you want to be good investor always invest for long-term, if you want to earn quickly, or under your timeline then the stock market is not for you, please save your money and stay away from the market.
• Don’t take a risk if you are trying to get out of debt. This can be taken care of before investing only.
• If you really planned to invest in the market then must do some research of companies, you required dedicated time to do some the leg work, take help from other websites like Scottrade, Sharebuilder, TradeKing and else. It’s dangerous to invest in any companies without doing research regarding companies thoroughly.
If you did research you can understand the future values of stocks as-
1. How much the initial dividend yield
2. What is the growth of values of each share is the amounts to the growth are earnings per share are the diluted basis?
3. How are the changes the valuation applied? By the firm earning or due to other assets, take measured of the price to earnings ratio.
According to this way of investment in stocks can make you benefited economically. Collect cash in the form of a dividend, proportional growth on basis of earnings by per shares, or as per company norms.
It’s better to make own portfolio as per your wealth to invest in a financial market like the stock market or in a mutual fund or any NAV based insurance policy. If you unable to clarify own portfolio design you may hire portfolio manager from the market they will charge bit amount to maintain your portfolio. But you also have to keep your eyes on the stock market.
Do study and research to get familiarize with different kind of stocks; basically, two types of stocks are Common and Preferred.
• Common stocks attract the newcomers, because of common stocks gives highest returns but come with the highest risk also.
• Preferred stocks are not giving always high returns; mostly returns are fixed like dividend not variable like common stocks.
How the price of stocks increase and decrease in value
As we know very well the law of supply and demand in any market caused to affect the values. As the demand for stocks increase then more investor come to invest in some stocks automatically the price of the stocks goes up. And demand is increasing due to company performance of company successes will grow and the investor gets to profit. If the company does not perform well the demand decrease and values of shares go down. The gaining is depends upon the future performance of companies, so it’s highly recommended to do study and research about companies before investing in his stocks.