How to make money in stocks?
The key to make money from stock market is to remain in the market for a long period of time. Of your total performance it is the best predicator. In comparison to your bank account a stock market might provide you with an annual return of 10 %. In modern days even small sized stocks are available to trade in the market. But now the question is in spite of offering a 10 % rate of return on investment why people are still sacred to make an investment in the stock market.
An effective tip to make money from the stock market is to stay in the market for a considerable period of time. Have a stock of your emotions especially greed and fear especially greed and fear. This can force you move from the market in the worst possible tenure and missing out on the annual return.
To get the ball rolling you need a brokerage account to start off and mint money from the stock market. If you do not own one now is the time to open a new one. Just you might need 15 minutes to open an account and things need to be in order so as to take action.
Time spend in the market means the duration you have gone on to invest. More time here means an opportunity to make money and lucrative returns in the form of cash dividend.
Excuses that you might have to stay away if you need to make money from the market
Perhaps stock earnings date would encourage you to invest in a stock market. Till date it appears to be the only market where goods are on sale and people are afraid to buy. It could sound a wee bit silly and this would be a situation when the market falls up a few per cent. Investors panic and then go on to sell out stock in a jiffy. Selling low and buying high are the key areas to cash in.
In order to avoid such a situation there are some things that you need to stay away from.
Would be waiting till the stock market becomes a safe place to invest
This is an excuse which investors resort to when value of stocks have declined. They are afraid to purchase from the market. The chances are that stocks would be declining for a considerable period of time. When a safe method is adopted by investors it means that they are waiting for the prices to rise. Safety would be tip of the iceberg to make higher profits and for perception of safety investors pay for.
Fear appears to be the main cause of perception. Rather than going for a long term gain, investors do focus more on the short term gain. When you feel that you are going to lose money you are going to do anything in order to avoid that. A sense of panic creeps in as you might sell stocks or not even buy stocks at all.
I am going to purchase it later when the rates are lower
This is a valid excuse on the part of stock buyers as they wait for the prices to drop. But with due consideration, research states that an investor on a particular day will not be aware which way the stock is moving on a short term basis. The market or stock could rise or fall at any given day. If you are a smart investor you buy stocks if they are cheap and hold them over time.
The reason of such a type of behaviour could be greed or fear. A fearful investor could worry that the prices of stock may fall and even wait for the next week. On the other hand a greedy investor will try to gain a higher price than that of today.
You could be bored of a stock and end up selling it
This is a norm that is sounded by investors if they are looking for a degree of excitement from their investments. For example in an action packed scenario like a casino. Enduring smart investment works out to be a real bore. If you are a clever investor you could end up holding the stocks for years and years and try to make compound gains from them. Investing is not a one day game. If you want gains you need to wait and not when you trade day in and day out from the market.
The main reason for such behaviour is excitement levels of an investor. His could be guided by the fact that a successful investor trades every day to make some profits. Some of the traders go on to do this whereas others focus on the outcome entirely. No form of excitement bothers them and for this reason they stay away from emotional decision making.
Individual stocks
If you are satisfied with a 10 % annual return on stocks, the best place to start would be an index account. This fund would comprise thousands of stocks and main benefit is you need less information about individual stocks to make it big. Once again main quality to succeed is discipline.
If you plan to make an investment in an individual company, for stock trading you might need a good stock broker. Potentially you can earn much more than an index fund, but a lot of research has to go in acquiring information about individual stocks.
To conclude to make money in stocking marketing becomes easy if you follow certain tips. One effective tip would not be spending too much on brokerage. The amount of profit that you earn a major sum goes in the form of brokerage. So better avail services of a discount broker. Secondly stay away from panic in all situations. This would cause you to make emotional decisions and you end up selling stocks that you were not supposed to do .The market is a vibrant one and rationale decision is the key.