Mistakes investor make while investing in Share Market.

When I heard of investing in Equity (Share/Stock) market for the first time, I instantly refuse, you knew why, because although 90% of new investors in the market lost their money and go home empty-handed.

The market is always giving tremendous growth, considering long-term every year, why new investor unable to grab the profit.

It’s all depends upon:

How you handle your investment and market behavior.

Experts earn from the same market in the same situation and take their profit home.

Why not us?

In this article, we will understand the low pools of the journey, (from your first thought of investing to the profit).

Be patience or never regret

Most of the people are keen to invest in the stock market, but they have a lack of patience, they need their money back with 100% return (frankly speaking).

They feel energetic when the market is in bull shape but need their money back on the same day when the market is down.

Stock market definitely boosts your money but you have to think long term.

You not only have to invest your saving in the stock market, but you also have to invest your time and faith.

“Be patience or never regrate”

Not interested in acquiring Knowledge

For acquiring something we must possess the knowledge, in share market everybody wants free advice and instant results, but no one interested to learn about share market.

Although understand company valuation (which is a backbone of share price) is not a rocket science, there are few basic fundamentals and practice required.

There is no basic formula to evaluate the company share price.

You have to understand and acquire the knowledge, there are several books and crash courses floating in the market.

Your own knowledge never let you down, even if you are standing alone on the busy street.

Emotions don’t work in the Stock market

When we enter a clothing store to buy a shirt (a perfect one for an office meeting), there is 100 % possibility one shirt looks appealing for us.

We look at dozens of shirts then, but we buy that shirt only.

Why?

Because of the mindset “what we want” and “what we get”.

There is a similarity in both the things.

But this concept does not work in the share market.

When we enter into the share market, we select some shares (maybe heard somewhere).

We fall in Love with those shares and even if the share is overvalued. We invest the whole money into it.

And that act broke our heart in pieces.

Never get emotions on the table, we are here (in the share market) to earn money.

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Listen to the analyst but – decide yourself

Most of the people in the market don’t want to analyze they depend and trust 100% on the analyst, who work on behalf of the company as well investor.

If you are a small investor, you definitely received a call from some brokers, who will guide you to invest in selected shares and in return they will charge you a nominal fee.

My question is?

Do you trust those analysts, we have to invest some time and study the company, There is no perfect company in the world.

I want to share one of my personal experience “I invested one day an amount of ? 50000 in the stock, I heard from an analyst.

After 6 months my investment drop to ? 15000.

Take a quick review before investing in a company

As we discussed in above points, you must be smart enough to control your emotions.

Some company business model and marketing strategy, especially in IPO looks very attractive.

Being an investor you must take a quick review of the background, management efficiency of the company.

Even in some company, people invest and stuck without looking at the profit margin and future company efficiency.

Some of the quick segments of the company we must calculate before investing.

  • Management efficiency
  • Order book
  • Dividend Yield
  • Profit Margin
  • Debt

Even we have to learn a lot before investing in the company shares.

My point is, your approach towards the stock market must be clear and avoid wrong investment decision.

This approach would guide you to take the correct decision towards stock investing.

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3 comments

  1. Great article. I highly agree with this line “only invest money that you can afford to lose”. Even I have the same experience. About 5 years ago when I just started stock trading I had done lots of silly mistakes. After lots of ups and downs, I’ve learned some valuable lessons and now stock trading is my second source of income.

    Thanks for sharing.

  2. Fantastic post I really enjoyed. thanks for sharing such type of article. I learned lot and would like to say it is very important to invest money to secure your future.

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