My Insurance Insider and Finance Blog

Image via WikipediaSome experts contend that entering into a lucrative but challenging world like stock investments are never made for the faint hearted. I know the true notion behind this, if you’re loosing your hard-earned money fast in a market crash. You never know when market will burn it’s fat or will be sky-rocketing.

With the economy seemingly riding on a roller-coaster ride in the recent times, investing with the right stocks seems to be next to impossible. Thanks to information technology (IT) revolution. With the advent of IT, everything seems to be changed drastically. Now people from all over the world go crazy over stock market investments. The days are gone when we used to trade in physical share certificates with lots of loop-holes. The whole trading system is now replaced by highly transparent ‘Demat‘ (De-materialization) system.

Today, stock market investments are selling like hotcakes. It seems that it has always been the focal point of every investor to get a stock no matter what. Some people are settling with special arrangement like online trading with net-banking facilities for funding their trading account.

Now I want to give some brief advices from my everyday experience for those who would like to get the best stock market investment tips:

• Stock Market Business is risk-oriented:Majority of people believe that buying stocks are as easy as 1-2-3. Of course, they can and in fact anybody is capable of doing so. But the problem lies on the fact that a very handful of people only know when to sell the stocks. And that is, in its greatest sense, the heart of stock market.In a bull market(when market is going up) you perhaps never think about the point of entry into a stock. But if you want to be a winner most of the time in a bear market like today’s, you’ll have to be extra cautious and calculative at which price you’ll be going to purchase a stock.

  So, the best advice for people to get the best stock market investment, it is best not to gamble everything that they have on it, especially if they don’t have a good understanding of how it works. It’s better to loose a little than loose really, really big.

• Adopting to Trailing Stop-Loss Strategy:Its basically a kind of technical level at which you set the sale price of your holding stock that automatically get sold if the price hit that level and below this support level, it’ll suppose to be trailing or stop its advancement. If your are unaware of technical support level, you can consider 5% or 3% filter of the purchase price as the stop loss level.
• Investing in IPOs/Secondary Stocks:Investing in IPOs could be a good choice if you can do a little bit of research into the background of that source company and company’s sectoral position in today’s scenario. Even if an exciting IPO of battered sector of a big company looks very attractive, it is a risky for investors to invest in it.The secondary market(where you can buy stocks directly from the market) is more convenient and better option because here you’ll get the chance to analyze a company by way of its past results and fundamental story.
• Set Target for a Medium-term to Short-term Projection:With the recent tumbling stock market, a long-term investor can’t remain dormant for a longer period of time (say 2-3 years). If market get crashed, you’ll earn only by way of dividend. Today it’s oftentimes seen that market reacts heavily to a bad news (globally) and corrects deeply loosing several hundred points in a matter of a few days. And as a result you might happened to see the price at a level you bought it several months ago(and without any return). So what’s the use of investment?
• Always Leaving Out the Greed:Greed is one of the major trailing factors why you loose 99% of the time in the stock market despite of killer strategies. You always should book profit when it reaches a certain predetermined price level by selling 50% of the holding shares. For rest of the shares you can look out for a higher price target level with a supportive stop loss.The most important thing about stock market investment is not so much to pick the best but you should be gainer in buying the stock at the outset. Interestingly every aspect of the market(along with stocks) can be predictable in much profitable ways by adopting technical analysis which I’ll discuss later on.