Stock market is a vibrant market where state of confusion can emerge at any point of time. When investors are in a state of confusion they cannot figure out what stock to buy or sell.
Do not allow emotions to tamper with your judgement
Most investors end up losing money in a stock market as they are not able to have a stock on their emotions. Greed and fear takes over them. In making money in a bear market is very difficult to resist. When investors hear that a reasonable amount of money can be made in quick time it forces them to speculate. In hindsight they end up buying shares of an unknown company that may lead to loses in due course of time. They end up investing without taking stock of the risks involved in stock earnings.
Rather than creation of wealth, investors end up burning their fingers badly. When it is bear market investors are in a panic mode and they sell their stocks at a low price. Greed along with emotions is the worst fears during course of investing.
A broad portfolio has to be developed
To earn money from a stock market diversification of your asset portfolio is an important step. With minimum degree of risk you are looking to make maximum profit. How you diversify does depend upon the risk taking capacity of an investor.
Set realistic expectations
No better feeling that to expect the best from your investments. If you have unrealistic expectations you could be heading for more financial trouble. Say for example a lot of stocks have gone on to generate more than 50 % returns in a bull market.
But nowhere has it stated that you have to be expecting the same investment norm from a stock market. Ideally you should be earning around 12 % annually from a stock market and if it is more than that you should end up laughing.
Invest in surplus funds
Stock market is a vibrant market and it is always suggested that you invest your surplus funds on the same. In the present scenario it is not that you might end up losing a lot of money. Any investment in the months to come can hand you high returns
But till date no one is 100 % sure of the outcome. For this reason you need to take risk and this is where surplus funds come into picture.
Monitor in a rigorous manner
All of us are part of a global world. If something happens in one corner of the world it would have an impact on financial markets. For this reason we need to monitor stock market and take into stock the desired changes.
If due to lack of knowledge you cannot keep a stock of your portfolio, it is suggested that you take help of a financial advisor who would do the task for you. If you are still not able to do that, stock investing is not your cup of tea.