When it comes to stock market, every individual aims to make it big in the market and not to lose money. And in this blog post we will tell you 4 thumb rules to make it big in market.
Greed, a major emotion of every individual is one key reason for losses one suffers in the financial world. The domestic market is heading for another bull run and this emotion will again take over minds of investors.
Global investment bank Morgan Stanley believes the Sensex can touch the 33, 000 mark by the end of this year in base case scenario. However, in a bull-case scenario, it can reach the 39,000 level.
In coming weeks we can expect domestic equity benchmarks BSE Sensex and NSE Nifty to touch new peaks.
If you want to make quick cash in the forthcoming equity bull run, you should focus on the below given rules that can assist avoid losses in the stock market.
A number of investors invest money in stocks without understanding the business. Proper understanding of a business can assist investors understand how income can grow with the changing business dynamics. So, in short you should not invest in a company without the knowledge of the business.
Often people invest in the stock of a quality business but at higher valuation. As a result, in the short run they might have to face the losses. One must always compare the stock valuation with industry average or its peers before investing. Buying a stock at a higher valuation like higher P/E (Price to Earnings) ratio can cause loses even in a bull market. The P/E ratio tells what the market is ready to pay now for expected future earnings of the company. By comparing a set of stocks on the basis of PE ratio, you can get a nice idea of how cheap or costly a stock is on relative basis.
Inexperienced investors generally get tempted by market movement and try to find penny stocks expecting multibagger returns in coming years. According to good stock consultant in India one should avoid looking for a penny stocks in a bull market, as their valuations don’t look cheap. Also you should ignore small companies with untrustworthy promoter backgrounds.
Selling a quality stock after a smallest of negative news is one of the biggest mistakes an investor can make. Most investors who are able to make money in the stock market work on ‘buy’ and ‘hold’ strategy. Negative news can increase the volatility in a particular stock for short time, but one should not sell a stock in hurry.
To know more about stock market feel free to contact Research Guru. We are a good stock consultant in India.
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