Stock market!
One word that defines Money, Risk & Adrenaline.
For few it is also synonymous with greed, materialism and gambling, however, these are the same people who have a problem for every solution.
Truth is, if you are willing to work hard and can wake up every morning with the same motivation, this can take you to financial freedom in no time.
How?
Start with these 5 easy steps to get a kickstart.
1) Take the first step
Majority of the people wait for the perfect time or enough money to invest which of course never happens but to understand how to invest in share market you have to be more decisive and active.
As they say, the biggest risk one can take is of not taking any risk at all. No doubt, its high risk & you need a lot of knowledge to calculate. However, what many fail to understand is that you can never learn without PRACTICAL knowledge. You can’t rise without falling, so don’t let fear control your decisions and begin your journey today.
2) Understand your risk-taking ability
Just like everyone has a different mindset, everyone also has a different appetite for risk. Therefore, strategy that might work for your best friend, might not work for you. One can start with taking 2% of the capital and invest it in high risk assets and then reduce or increase the share of risk capital as per their comfortability.
3) Focus on big names
There are 3 types of shares one can invest in: Small Cap, Mid Cap and Large Cap.
In layman’s language,
- Small Caps are those companies with market capitalization of less than $1 billion.
- Mid-caps are the ones with market cap between $2-$7 billion dollars
- And large caps are the sharks with market cap of more than $8 billion.
Now, the market is based on buying and selling of company shares. The more these are bought, the higher it moves and vice versa.
It’s obvious that people trust companies with high market cap more as they have a strong hold in their respective business and hence are considered as a safe bet.
4) Learn
Most importantly, people think that the stock market is all about luck and of course by now you would know that these statements are not perfectly true.
Investment and Trading require a lot of study, calculation, analysis and application based learning.
It tests your emotional intelligence on every step you would have to think on your feet. So stop blaming your destiny for your losses and start working hard.
5) Never get carried away
It is very easy for someone to get complacent when they see share prices piling up or scared after getting continuous losses. It is natural for you to behave like that but the problem arises when it becomes your habit.
You can’t learn how the market works even after 3 decades of experience, so don’t even think that you will only make profits or losses, because in both the cases you will regret.
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