Stock investment decision making


Stock investing is a savings game. To organize each game, you must know and follow the prescribed rules and regulations. Any violation means you are penalized. The sanction is proportional to the seriousness of the violations of the rules.

Just as navigation is easy in the calm waters of the sea, apart from the deep knowledge you have about stock investing, the first condition is that you should handle the issues of buying and selling with a mind calm. Let it be understood that your emotions have no role to play in the face of trading volatility. Even in the normal market, they have no role. When you are not in the right frame of mind, you make the trade decision at the worst possible times.

Fear and greed combined with emotions is a bad scenario an investor can create for themselves.

Some of the points to consider before trading stocks are:

1. For starters, don’t go with killer instinct. Beware of modest returns.

2. Adopt the age-old tactic of long-term returns. Invest the same amount of money at regular intervals and buy in small lots. Naturally, you will buy more shares when prices are low and less when they are high.

3. Take advantage of the services of a broker. Before hiring him, meet him face to face in his office. Have a preliminary discussion about your financial goals. Obtain a copy of the company’s commission schedule. Determine what kind of services you need from the broker. You may need recommendations, research reports and investment advice.

4. Once you have focused on engaging a particular broker, give the correct information about your goals, personal finances, net worth, and previous investment experience. This will allow the broker to make the appropriate decisions for you.

5. You now come to the pivot point. Who will control the decision making for your trades? You must specify in writing that the broker has decision-making authority, if this arrangement suits you. Once this authority is granted to the broker, he will make decisions without consulting you. These decisions will be the best for you under the prevailing conditions. Whether you suffer losses or gain profits in a particular trade is not the concern of the broker. Discretion should therefore be granted after very careful consideration when you are fully convinced of the broker’s capability and track record of success.

6. Never invest in a stock of which you have no knowledge and avoid guesswork. Know basic financial terminologies and the fundamentals of investing.

7. You invest to make profit, not to lose money. At the same time, you should be aware that equity investments are always associated with a certain degree of risk.

8. A company’s past performance does not guarantee its future success. Do not make hasty investment decisions on the strength of the seller’s call intensity. He does his business, do yours please!

9. Beware of catch phrases often used in stock trading, such as “inside information”, “confidential leak”, “an acquisition is in sight”, “a dynamic product”, etc. Your money can never double in six months as promised. by many!

10. Do your best to limit transactions. The more transactions, the more commission you will pay.

11. Don’t focus on just one product. Let your portfolio take care of different industry segments.

12. Broadly speaking, there are four types of investment strategies: the fundamental approach, the psychological approach, the academic approach and the eclectic approach. Each approach requires detailed study. Keep your knowledge up to date on these strategies and you may need to modify your strategies depending on market conditions and volatility.

You will evolve into a good investor as you gain experience and theoretical knowledge. Both are important. Never lose focus and veer off track, while investing. Years of hard work and profit can be undone by just one bad trade.

Source by Amit Malhotra

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