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10 GOLDEN RULES FOR INVESTING IN THE STOCK MARKET

Introduction
The lure of making it big has made investors spend tons of cash in the stock market.It takes a lot of analysis and understanding of the market to make correct investment choices.

The stock market has experienced a lot of up and down in few years. The market is highly volatile, leaving investors wondering if they should investor not.

This is not a sure-fire formula to help you make millions on the stock market, instead these are golden rules that can help increase your chances of making right investment choices.

Avoid the crowd mentality
Don't get influenced into buying a particular stock because everybody is investing in it. That strategy would backfire in the long run.

Warren buffet says, "Be careful when others area unit greedy, and be greedy when others are fearful!

Do proper research
Before you start investing in any stocks, make sure that you properly do so after an informed decision.
Do not put your money in the stock market just because of the name of the company or the industry it belongs to.


Invest only in a business you are familiar with
INVEST IN A BUSINESS, NOT A STOCK.
Before you invest in a company, make sure you know what business they do- their profit returns, long investment returns etc.


Be disciplined in your investment
Be patient and disciplined when investing. Approach investment with a long-term picture in mind.
Do not just pour in money into a stock markets, invest systematically and patiently.That way you would see great returns in your investments.


Keep your emotions in check
Half of the investors who lose their money is due to their inability to control their emotions (mainly fear and greed).
Stories of amazing returns and get rich schemes have cause investors to speculate, buy shares in unknown companies without knowing the risks involved leading them to crash and burn. Other times, investors panic and sell their shares at rock-bottom prices. Do not let emotions guide your investment.


Create a broad portfolio
Diversify your portfolio across asset classes and instruments to earn optimum returns on investments with minimum risks. Note that your level of diversification would depend on your risk taking capacity.


Be realistic
Warren buffet says, "Earning over 12 % in stock is pure dumb luck and you laugh at it, you are for sure inviting trouble for yourself."
Nothing is wrong in hoping for the 'best' from your investments, but you can get into trouble if you base your financial goals on unrealistic assumptions.


Invest only your surplus funds
If you want to risk investing in a volatile stock market, common sense demands that you us only surplus funds that you can afford to lose.


Monitor rigorously
Learn how to constantly monitor your portfolio. Any important events happening in the world can have an effect on the stock market.

If you can't do that, put your money in investments that are relatively safe and involves less risk.
Are you ready to build your brand and productivity?

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