Do you want to become a big investor like the ones you read about in newspapers and magazines?
I am not joking at all. Who decides the person to become big?
It is the efforts that we put into our work. Every single step that we make towards our goal counts and decides our future. I am not saying that you will become rich in a day. It is a process, and you have to work for some years, and one day you will be rewarded.
The journey of becoming a successful investor starts from small efforts and slowly and gradually increasing your wealth.
In the article, we are here to provide you with some outstanding stock market tips that big investors and successful business people use for them and are at the place they deserve to be.
To begin with, we know that the investments are risky as no one has seen the future of the stock market. It is possible that the market may fall or may rise at a glance.
Investment should be made with proper strategies and knowledge of the market.
Today, I am your stock market tips provider and will guide you with free stock market tips to help you with your investments.
So, let’s begin with the discussion.
Stock Market Basics
Before beginning with the free stock market tips, you should have the market’s basic knowledge.
The companies get these public funds and increase their capital, and the company’s performance is seen as the price change of the stocks. So if the company does well, then there is an increase in the price and a profit for the investors, and vice-versa, there is a loss.
You can earn huge profits if you have good stock market knowledge, but if you don’t have, then there are many ways by which you can learn the stock market like reading stock market books, joining a good stock market course, etc.
In the next section, as I promised, will be your stock market tips provider and discuss the best stock market tips for your investments.
Best Stock Market Tips for Beginners
1. Understand Your Investor Profile
There are different requirements and needs for which investors invest to fulfill their goals.
Let us understand this with an example.
Assume that there are two investors, X and Y. They want to invest for the future education of their children and say that they are going for 15 lakhs. X being a risk-taker, intends to raise the amount in 5 years while Y is an average person who can wait for ten years.
They are active investors who consist of mutual funds, fixed deposits in their portfolio.
As there is a big-time gap between X and Y, they have to follow different strategies to get the desired results in the strict time duration.
This is where understanding of our investor profile comes into play.
I hope you got it cleared in your mind.
We are now moving to the next tip.
2. Setting and Knowing the Financial Goals
Here, you should be clear with your financial condition and the risk you are willing to take for your investments.
Setting a limit helps you invest your money with no compromise with your financial needs. It means that you are investing the money that is not causing a problem to your lifestyle.
There can be various reasons to invest, like investing for retirement, investing for children as the goal varies, so the type of investment and amount varies.
You should be clear with the goal; otherwise, it may cause a big problem at present.
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3. Investment Time
After setting your goal, now it is your turn to set the investment time. Again, it differs from the goal and from person to person.
Some people can’t wait for longer times while some are patient and can wait for a long time after investments.
If you are patient, you should invest your money ideally for 8 to 10 years. If not, there is Intraday Trading for you that completes within a day.
For short-term investing, you need to diversify your portfolio, and you will get various options of investing as per your time requirements.
4. Understanding Self’s Risk Tolerance
Every human being has a different tolerance power, and you must have also experienced this in your daily life during small ifs and buts.
This point of understanding the risk is considered as the crucial point in investing.
There may be such a risk to your capital that a complete loss can also happen.
There is a simple equation,
Higher risks = High Returns
It is not a 100% accurate relation. This equation is mainly for those ready to risk their money to any extent of the loss. Ordinary middle-class people first think of at least saving the capital than earning the profit. So, for them, this equation fails.
Hence, understanding the amount of risk you can take is important to know before investing.
Read More: Stock Market Terminology for Beginners
When you put tolerance away from the equation, then emotional investments are introduced.
When you are ready to answer such questions according to your plans, you gain a lot from the market.
Note that this is the best tip anyone would ever suggest to you.
5. Emotional Investment Decisions
This is another factor that decides the investment that you make.
Do you know that during the beginning of the lockdown in March, many investors sold their stocks and thought to be on a safer side as it was obvious that the prices would go down?
But the ones who didn’t decide in a hurry waited for the time to heal things, and today the prices are again on a high.
It would help if you avoided these things while investing.
It is confirmed that the stock market would go up and down, but the thing is, if you have a good sense of humor, then no one could ever stop you from getting profits.
It is not at all possible to avoid risks in the stock market. Whether you make a small investment or a large one, it doesn’t matter as there is always a risk factor involved.
So, what does diversifying mean?
It simply means that investing in such securities which have no relation with your portfolio.
In other words, the performance of one security doesn’t impact any additional security and overall investment.
There are various places like gold, real estate, etc., you can invest in these assets.
Apart from these, there are many ways to diversify your investment.
- Across Market Capitalization
Looks like a complex term? No problem. Let us see an easy explanation.
Understand market capitalization as the total size of the company. When you buy some company stock, then there are a few options for you to choose from, small, medium, and large companies. It is seen that there is less risk for large companies and also fewer profits and similarly high risk in small companies with significant returns.
- Across Sectors
Many new investors tend to invest in companies they either work for or know very well. This is not a bad idea, but you should have a backup plan if that company crashes.
- Across Geographies
The politics and changes in the country directly impact the stock prices so, many investors invest in some big companies of other countries.
Individual Diversification should be done keeping in mind the risk tolerance. There are stock market courses that will help you in diversifying your portfolio.
7. Never Invest Borrowed Money
Borrowed money doesn’t always mean that you have borrowed some money from your friend, and you are investing that.
Yes, that can also be considered borrowed, but here we are talking about the new investors who open a margin trading account and start investing for which the brokerage lends 50% of the trading amount. Again, this seems interesting and helpful, but in reality, this type of lending is not a good option for you.
Try to understand this with an example.
Suppose you wanted to buy 100 shares of a company and 1000 Rupees is the cost per share.
The total amount becomes 100000, and the firm would lend you 50000.
Now, two cases can take place.
- The price per stock rises to 1500. In this case, the total you would get is 150000 out of which 50000 you would give back and finally there is a profit of 50000 for you.
This was to engage you with the article. The main thing is the next.
- If the prices fall to 500 per stock, you will get 50000 which is the same amount you will return, and finally, you get nothing but a loss of 50000.
No need to worry about this unless you take borrowed money. Just make wise investments as per free stock market tips shared via this article.
Read More: Top 10 Stock Market Books for Beginners
8. Avoid Predicting Market
This is the thing that you should ignore doing. A successful investor takes the best decisions and avoids future predictions.
Mostly, people think of investing in low-rate stocks and think of selling at a high price. For doing so, they do a lot of hard work like looking at the past performance of the stock, trying to figure out the future performance based on the past one, looking for data here and there. These things are just a waste of time and money.
You tell me, do you know what will happen in your life tomorrow?
No, you can’t do it. Not only you, not a single person, can tell the future. Just predicting the future doesn’t mean that the prediction will come true and the same thing will happen.
Avoiding these types of things help you a lot with your investments.
You don’t know, even a small company may rise, and a big company may fall in the coming time.
9. Keeping a Realistic Approach for Returns
Stocks are considered to give out the best returns among the other types of investments.
You can earn about 20% in long-term investments. However, for short-term like Intraday Trading, you can make a good amount.
Here is a stock market tip for intraday free of cost. You need to monitor your stock constantly and buy liquid stocks as this helps you to earn the best profit on the stock.
You may also think that you have read somewhere about getting 100% returns and even more. Yes, you are right. This can be true but in only some rare cases.
So, keep your expectations realistic and have a positive approach keeping in mind the risks.
10. Monitor Investments Regularly
It is the last free stock market trading tip but also the most important of them all.
A stock market is a volatile place, and you need to keep an eye on the price fluctuations. You should be ready to sell the stocks as you get a good price for your stocks.
After reading a lot of important stock market tips, we come to the end of this article.
Along with these investment tips, you should have a complete knowledge of the stock market, and for that, there are various stock market course available in the market for teaching a beginner.
I recommend you joining The Thought Tree as this is the best stock market institute that teaches the basics and advanced knowledge of the market with practical knowledge.
At last, I hope that the article was fruitful for you and gained at least some new things from it. Then, try to implement these in your investments, and you will surely get some help.