How to make money in shares

Although the practice of buying and selling shares has its own shares of risks, if practiced carefully with due diligence and research it proves out to be quite profitable.

Feb 25, 2018 02:02 IST India Infoline News Service

With each passing day, the cost of living is increasing massively. In such a situation to beat the inflation, it is very important to look for alternative reliable sources of income. Often people see share market investments as a sought-after source to make money. The volatility of the share market makes it a source of better returns especially with reference to the inflation.
Although the practice of buying and selling shares has its own shares of risks, if practiced carefully with due diligence and research it proves out to be quite profitable. So if you are looking forward to making money from shares following tips could be very handy:
  • Know your goals: It is the first and the most important step to know what your goals are. Once you pen down your expectations and goals, make sure you make a choice whether to invest for long-term or to make quick returns by trading. This clarity is important right from the beginning to strategize the further plan.
  • Plan your investments: Strategize an investment plan in accordance with your financial goals to avoid blunders and subsequent loss.
  • Pay attention to research and analysis: Once you plan to buy certain securities, it is very crucial that you conduct proper research about the company and analyze its market trends before making any decision. It is very important that you keep yourself updated and don’t react to lose tips for buying or selling shares.
  • Look at the bigger picture: Don’t get lured by the temporary things, rather look for a bigger picture and make much better returns along with long-term financial security.
  • Avoid Overtrading: It is very crucial to know when to stop. Thus, you must know how much to trade to avoid hefty losses. Overtrading is a very common mistake and must be avoided with proper planning and adhering to disciplinary approach.
  • Avoid herd mentality: Do not follow the herd mentality, only rely on proper research and analysis. Because what might work for one person, might not work for others.
  • Balance your risks: Taking higher risks for better returns might prove a no-brainer and could result in heavy losses. It is thus advised by experts to balance the risks according to the nature of investments and the target goals.
  • Keep yourself updated: Financial ups and downs very much affect the prices of stocks and as a result your loss or gain. Thus, it is important to update yourself to make better decisions.
  • Don’t time the market: It is better to make long-term investments as advised by the experts than timing the market. No one has ever been successful in this and thus, is often not recommended. It is almost impossible to reach the final highs and lows of any shares due to the highly dynamic nature of the market.
  • Invest with discipline: As an investor always follow a disciplined approach in investing to succeed. One needs to deal patiently with proper strategy.
  • Never let emotions overshadow judgement: The emotions mainly fear and greed often cause you to take wrong decisions resulting in hefty losses.
  • Build a broader portfolio: A broader portfolio would mean a diversified risk and even when the market goes through a rough patch you don’t end up losing on everything, rather on just a part of the investment.
  • Have realistic expectations: Don’t expect unrealistically to get disheartened at the end of the day. Keeping realistic expectations help you plan better and get better returns.
  • Invest only the surplus funds: Only investing surplus funds is the key to financial stability. As the stock market is very volatile and risky, so investing very large sums can cause financial instability in case of losses. Spending surplus funds would mean you would only lose the surplus in case of loss, keeping your financials unaffected to a large extent.
By following the above tips you can make lots of money in the share market and attain financial security and wealth accumulation.   

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