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