Golden rules of investing in stock markets

This blog contains some golden tips for the investors who wants to invest their money but are confused about the stock. This will help you to gain confidence in investment.

1. Avoid the herd mentality
   A person mostly follows his friends and relatives to invest in a particular market. The person himself gains the confidence to invest in such situation. But this strategy is believed to be inconsistent for the long term. People always follow the herd mentality, which is very risky if you are worried about your money.

2. Take informed decision
   Before you invest in the stock, first of all, try to discover the market. This method is performed by some of the successful investors. Some of the immature investors look at the name of different companies which are quite famous among a particular group of people. This is not the wise way of investing your money.

3. Invest in business you understand
   Try to invest your money in business instead of stock. Before investing, do some research about the business company as well.

4. Don't try to time the market
   You should never try to time the market as many of the investors have failed to do so. The financial planners every time warn the investors in order to not lose their money by this way. This is a fact that not a single person has been successful till now by this method.

5. Follow a disciplined investment approach
   It has been experienced that even the top investors have seen some difficulties. The instability in the stock has affected the investors to lose their money, be it a small investor or business tycoon.

1. Do not let emotions cloud your judgment
   Some investors lose their money by not showing patience. They fear the market and lose the control on their emotions. They hear about heavy return being made in another market which results in making them greedy to earn more money in a short period of time.

2. Create a broad portfolio
   This is believed to be the key factor to earn most favorable returns on investments with a little risk. Diversifications level depends on every investor’s risk taking capacity and potential.

3. Have realistic expectations
   Expecting is good but expecting too much can be dangerous for you. This can result in creating difficulties. In addition, some stocks have earned more than 50 percent in Bull Run recent years.

4. Invest only your surplus funds
   Even though, you may face some risk in the unstable market. Therefore, you need to have some surplus funds. It is not like you will lose money every situation.

5. Monitor rigorously
   We desperately need to monitor our portfolio. Try to take help from some good financial planner who has excellent knowledge of the market.