| Investors can use a number of strategies to | | | | should thoroughly research the market in |
| invest in the stock market. To begin with, | | | | which the chosen company operates. |
| they need to analyze market trends, learn | | | | |
| about the market in which the companies they | | | | Long-term vision and planning is vital. |
| are interested in operate, and purchase | | | | Investors should evaluate their capital |
| shares at an appropriate time. | | | | strength, and set their tolerance limits, |
| | | | before investing in a company. This means, |
| Usually, good companies announce their | | | | knowing when to hold on to the shares, and |
| profits, or their status in the market, at | | | | when to quit. |
| certain times of the year. The prices of | | | | |
| their shares tend to increase before such | | | | It is generally advised to devise and apply |
| announcements are made. Therefore, investors | | | | an exit strategy cautiously. Investors can |
| need to watch out for these periods, and not | | | | make their exit when they have gained good |
| purchase shares at this time. In other words, | | | | returns over a certain period. |
| it is important to wait for the right 'Market | | | | |
| Timing' for trading in shares. Some basic | | | | The returns gained from selling the shares of |
| stock market strategies for investors are | | | | a company can be re-invested in some other, |
| listed below: - | | | | promising higher profits. |
| | | | |
| Make a well-planned investment portfolio that | | | | Investors should also set their tolerance |
| satisfies a particular level of risk | | | | limit for the amount of loss that they are |
| tolerance. | | | | ready to bear when the market is down. They |
| | | | can exit when their losses approach or cross |
| Keep reviewing and updating the investment | | | | this predetermined limit. This strategy of |
| portfolio to keep up with market trends. | | | | limiting the amount of loss an investor can |
| | | | withstand is commonly known as "Stop Loss |
| The technical analysis of stocks helps in | | | | Limit". |
| gaining better knowledge about a company: its | | | | |
| profits, its market capitalization, and its | | | | Another strategy investors can follow is to |
| future growth prospects. Equally important is | | | | 'Buy and Change Frequently'. Market research |
| to be able to understand and apply the | | | | shows that every company has some limit on |
| quantitative measures of the stock market. | | | | the expected gains from their shares. |
| | | | Investors can therefore move out of a stock |
| Since investing in the stock market is | | | | when they have achieved maximum returns from |
| complex, inexperienced investors should | | | | shares accordingly. It is important to invest |
| always seek help from financial advisors and | | | | in a variety of companies to withstand the |
| stock market analysts before committing | | | | losses of a few. |
| themselves and their money. | | | | |
| | | | The objective of any investment is to |
| The motto being "Buy Low and Sell High", | | | | maximize returns while minimizing risks. |
| always buy shares when their prices are low, | | | | Diversification helps in maximizing returns |
| and sell them when the price goes up. | | | | from investments in stocks and bonds by |
| | | | managing risks better. Investors ought to |
| Invest intelligently. A sharp sense of the | | | | distribute their investments across several |
| market, along with a good knowledge of the | | | | categories like foreign securities and mutual |
| company you plan to invest in, helps in | | | | funds to be on the safe side, and in the |
| making better investment decisions. Investors | | | | process enjoy good returns. |