Don’t encourage rumour mongers while investing in stocks

As told by Clay Shirkey,”It’s not information overload. It’s a filter failure”.

You must have heard that the popularity of the stock markets over the last few decades has increased. Stock markets are for eternity making headway. This is the very reason why the stock market is said to be explosive. It is very tricky to envisage the stock market. Occasionally it immediately rumbles and along with it the market rises and at other times, it just collapses. There is no warning! Whenever there is a detonation in the stock market, the populace likes to call it a bull scamper in the stock market. And when it is declining, people call it a bear run event in the stock market. It also allows eruption of false promises, misdirected signals and misplaced recommendations where we need to be vigilant on and not succumb to the so called “noise”.

It is in such events that we have to give a deaf ear to humour mongering and rather trust research materials or study the companies one is looking at investing in or invested in already.

Some tips to separate the noise from the music:

  • Don’t fall to random WhatsApp or sms tips from non-credible sources
  • Cross check your stocks’ data from reliable sources like BSE or your trusted broker
  • Study charts and seek the trends
  • Don’t fall trap to “guaranteed” returns, there is no guarantee in stock market and is expressed emphatically as disclaimers by platforms and publishers
  • Consult your broker always during an IPO

Stock market is a place where we wander off easily from wrong advise or tips which we need to vet from credible sources, best is to ignore it if you receive any from places unheard off.

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The beginner’s guide to investing in stock markets

Investing in the stock market is the most common way for beginners to gain investment experience. But it often perceived as the most complicated investment option. Gauging the market’s highs and lows, assessing the market risk and figuring the right time to invest in stocks is a complex process. Yet, it is one of the most lucrative investments available. So how can one navigate through the world of stocks with ease? Here’s how you can get started.

Do your research

The best way to simplify a topic that is riddled with complexities is to find out everything you can before you take action. Read about how the stock market functions and understand the basic terms that you will come across as you become an experienced investor. Either through newspapers or through online research, it is prudent to gather information about the top stocks and take advice from experienced investors who can help you comprehend which stocks could prove beneficial.

Define the purpose of investing

Before you begin allocating your monetary resources to a range of stocks in the market, it is advisable to set clear goals about what all you want to achieve and within what specified timeline. Chart down your life goals, such as saving for your child’s education or planning a retirement fund, put down a deadline and then work towards figuring how much money you will need to fulfil that goal. This will help you make smarter investments that will yield results within your timeline.

Know your risk profile

The amount of risk you take in making investments changes at every life stage. For instance, when you’re young, say in your twenties, you have fewer liabilities (such as home loans), so you can afford to take more risks than when you’re in your thirties and have a family who relies on you. So choose your investments carefully and ensure you only invest as much as your risk appetite permits.

When to invest and when to exit

There is no right or wrong time to invest in the stock market, nor is there any clear way of knowing when to exit a stock. It largely depends on how you have planned your investment strategy, how you’ve decoded the market trends and how much risk you are comfortable taking.

The stock market may seem like a daunting place to start your investment journey, but if you do your due diligence, you can reap profitable returns. So, start now.

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