10 A quick guide to increasing your stock market returns
Investing in stock markets is often daunting as you could always hear people saying that stock markets have a mind of its own. However, much like the gold market where you can search up today’s gold price and track the market to understand the patterns, you can do the same for stock market. Check out this page for more info. But before you do that here are some tips to help you understand the market so that you get a flying start on your learning curve:
1. Learn about stocks before investing
This is the first and foremost do that you should follow to invest in a stock market. If you are not aware of what is the stock market and how it works, then you must gather all the information about stocks before investing your hard-earned money. Stocks are nothing but investments made in individual companies with the hope that these companies will grow and make profits in the future. So, if you want to invest in stocks, learn about how these companies work and generate revenue for their shareholders. The more you learn about stocks and how they work, the less money you will lose in stocks.
2. Start with basics
Before getting started with stock investing, it is important to understand the basics of stocks. For example, you must know what is a share, what are different types of shares (equity shares, preference shares), what is a company, and so on. These things may seem simple but they play a crucial role in deciding your investment strategy for stocks. To continue the parallelism with the gold market, before you start reading about today’s gold rate in Cuddalore you need to know in detail about the gold market. Once you have learnt all these basics, it will be much easier for you to find profitable stocks for investment.
3. Never try to time the market.
This is especially true for beginners in the stock market. There will always be stock market crashes and corrections, but don’t let that discourage you from investing in the stock market. Investing is a long-term game.
If you are scared by a downward trend, the best way to deal with it is to have an investment strategy based on your goals and risk tolerance. This way, you are less likely to make any impulsive decisions.
4. Start with Dividend Stocks
As a beginner, you should start investing in dividend stocks. Companies pay dividends to their shareholders from profits earned by them. When you buy stocks of such companies, you become their shareholder and can enjoy a share of their profits. The main benefit of dividend stocks is that they provide regular income along with capital appreciation.
5. Buy Stocks Directly Instead of Mutual Funds
While mutual funds are meant for diversification, buy stocks directly instead of buying mutual funds. This will help you learn about the companies whose shares you own and how they work. You’ll also be able to better understand the stock market movements when you own individual stocks instead of bundles of them (like in mutual funds). In addition, buying individual stocks helps reduce brokerage commissions and management fees that can otherwise eat up all your returns
6. Set Your Investment Goal
Before you start investing in the stock market, it is crucial to set your investment goal. You should be clear about why you want to invest in the first place; whether it is for long-term growth or short-term profits. Once you understand your investment goals, you can devise the best strategy that suits your requirement.