Venture Into the Stock Market

Share investment is all about doing the right things at the right time. The decision to venture in to the stock market is not the easiest of the options. To zero in on a particular group of shares for the purpose of investment is all the more difficult. Such special decisions need to be taken after making extensive research on the companies and by comparing the experience of other investors. Guesswork and speculation have no place when you decide to try your hand at investment in shares for the first time or in a big way.

Keep your ears and eyes wide open and continuously update your knowledge about the market conditions. Do not develop the attitude of self-contentment that you have selected the best share for investment, and you need not worry about their growth prospectus. Technological advancement might completely alter the situation for a particular product within a short period. The trusted customer of a particular product may change his suppliers when he gets cheaper alternatives. Such a development may suddenly hamper the growth prospectus of a particular share. Your belief and strategy in long-term investments does not mean you should develop a long-term lethargic attitude. You may not sell a particular share showing the downward slide over a period, for some particular reasons and your confidence in the management of the company to turn the tide in its favor. What is important is, you are expected to know your reasons well and you should not get caught unawares!

Take for example that you decide to invest in oil shares. You will get advice from the most unsolicited corners that the oil shares are safe and they are growth shares. Taking the support of this popular proposition, do not make a hasty decision to go all out for investment in oil share in a big way. Not all oil companies are alike and may have different growth rates. You need to make careful analysis about the oil companies and go for the ideal ones according to your calculations and judgment. The classification and the intrinsic legal worth of the share also is an important factor to take the decision on investment. The common shares are riskier mode of investment, as the earnings by such shares are reinvested by the company. The risk as well as the profitability is on the higher side, depending upon the circumstances in which the oil industry is placed at a given period. These are the situations where professional advice comes to great help. The effect of one bad decision may undo the rewarding position as for your investment in other shares.

Many are of the considered opinion that the right time to venture into stock market is when the market is on the high and is showing the trends of becoming extremely bullish. The success stories that often happen in that phase of the trade enthrall them. The investor feels that he is losing the opportunity. The rush of blood in the first flush of enthusiasm does the damage. The sudden turnaround in the share which they thought was on the verge of becoming a blue-chip, gives jolts to the investor. He has lost substantial money, and at that level of low confidence, one is likely to make more losses.

The experienced investors sometime invest without rhyme and reason, just to create the hype, about a particular share. The gullible ones also go on the buying spree, without thinking about the consequences. When the experienced investors begin to pull out their money, the panic button is pressed. Now every investor wishes to get rid of those shares. With no adequate demand, they sell and incur huge losses. Be a careful slow gainer, than a rash and quick loser. The stock game is for the one who has the quality of perseverance.

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