Investing In The Stock Market - Tips For Beginners

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There has been a steady growth in the popularity of stock market investing. Though, the fluctuations in the market can impact your portfolio. If you are a beginner and want to invest in the stock market, then you will have to follow a strategy to avoid losses.

When you start investing you learn about the investment horizon. The investment horizon is the time period for which you are ready to hold your investments. There are two types of investment horizons: Short term and Long term.

Short term investment

It is called a short-term investment when the investors buy securities and sell them within 3 - 4 months. This allows you to make a quick profit in the bull market. You can make a profit if the prices of the securities increase.

Long term investment

Long-term investing is when you buy securities and hold them for multiple years. This type of investing ensures that you mitigate the risks as they multiply over time. These types of investments provide the best values of securities to the investors as the long period increases the potential for benefits.

Which investment type beginners should go for?

If you want to make quick profits, have the ability to take risks and do not want to invest for a long time then short-term investments are the best option.

If you want to invest systematically for the future then you should go for long-term investments.

Investing tips for beginners

• The first step is to choose the type of investment among the options available like stocks, mutual funds, bonds, derivatives and more. You should understand each option before you start to invest.
• If you want to trade online then a Demat account is a must. You should compare and analyse the different stock brokers for the features offered in online trading before choosing one.

• You should research the investment option you choose. This will help to mitigate the losses and improve the profits. 

• Before you invest, you should set your investment goal. Depending on your goal you should choose the investment horizon, amount, security and risk.

• Monitor your portfolio regularly to understand the performance of your investment, reduce the losses, and identify the stocks that are doing well so that you can do future investments.

• Stay updated about the current happening in the market to understand the direction of the market.