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Do It or Lose It: Stock Market Investment Simplified

Stock Market Investment:

It might sound intimidating idea to a novice but stock market provides tremendous opportunities to the traders and investors. The risky nature of the business might sound alarming to the hoi polloi but money lies mostly in the risky jobs. With careful planning and research you can minimize and control the risk factor as well.

Start with little money:

The best part of stock market investment is that it can be started with little money. Unlike real estate or retail business you can develop the business orientation at the cost of little risk. Investment in stock market can be started with as little amount as hundred dollars. Trust me or not but its all about landing into the market with a little money in your but realistic expectations of reasonable returns.

Do it as an amateur:

You don’t have to necessarily take it as full time professions rather take it as an amateur. Carry on with your routine stuff and invest in stock market along with it. All you have to do is pitch in a bit more effort and follow your stocks. So, it won’t disrupt much of your routine life and will earn you good many chances of multiplying your investment.

Easy to operate:

The virtual world of stock market is easy to access, making it remarkably smooth to follow your stocks. Back from your office, resting on the couch, sipping your juice and here you go, tune into any business channel and monitor your stocks. You can even have stock alerts on your cell phone and email which will help in making timely decisions and will keep you updated about the general market trend. There are many brokerage firms offering personalized portfolio which helps you keeping tabs on the market.

Ideal for long term investment:

Make up your mind that your investment will take some time to grow and there is no luxury of taking it out any time you want. I must reiterate the fact that your investment is fixed for minimum three to five years. Stock market denies the indulgence of pulling out your investment at your time of need.

You must wait for the ripe time to draw your capital out. So it is an ideal investment if you are willing to forego the investment for sometime. Even if the stocks are going down, don’t make hasty decisions; just be patient and watchful because that is way stock market works.

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Stock Market Investment

Going in literal terms, a stock market is a place for the trading of derivatives and company stocks, listed on stock exchange. The stock comprises of shares, commodities and so. As earlier said, ‘a risk cell’, this market is full of uncertainties and risks. Risks, to loose the hard earned money. Every investor invests in stock market with a perspective and motive to earn positive better results. The bulls and bears are the situations with which you may make some or loose some. The uprising in stocks is termed as bulls’ situation and vice versa.

As such, stock market investing is not a child’s play. The investing in stocks may be carried as a sideline business by an investor but the amount of knowledge needed to invest cannot be side lined. It demands a fearless, fiery and extensive knowledge to understand moods of the stocks. An intuitive person may succeed once but that does work for all time. All counts is the experience in this field along with the almighty luck. Yes, luck is also an important factor that moves on with an investor.

The stock market always has shocks and news in stock. No one can be sure about what’s next? The pressure of bulls and bears along with the fear of losing money and the predications and tips by the companies always adds spice to the happening world of stock market. One has to be familiar with the dictionary of stock’s world. What I mean is- the stock market has its own words to represent the situations and products. Bulls and bears being the example, one has to work upon the dictionary used in this market. Intraday, future and options (f and o’s) are mere examples of these.

Being aware of the fact that it is a risky affair to invest, thousands of people invest daily in the stock market. To provide assistance there are brokers available who try to get the best possible deal. Brokers are the people who work on percentage basis to fetch the best deal. Very often, the commission is calculated on the money invested. This commission, in turn, is known as brokerage. This amount has to be paid by each investor who does not posses his own pass to trade directly in stock exchange.

Well, only one thing is certain and that is change. Changes are always certain, so does the experienced stock world.. It has moved on to cyber space from the clattered, clumsy stock markets, which looks nonetheless fish markets. The evolution of Internet is the reason for the revolution in stock markets as well as other trading. It got the easy access feature along with the comfort of operating stocks from one’s office or home. The speedy technology acted as a catalyst to break the norms of stock market. It is no more an alien world for people. Rather, it got unearthed and the mysteriousness of this trading place just vanished. Now, people are comfortable trading online and the investors and their investments have increased three-fold. The bulls and bears are no more only confined to the creams rather it has skimmed to the commons.

Moreover, the technological support not only acted as middlemen rather it worked as a magnet which brought thousand of new faces to the stock market. The advances of online brokerages, online trading and online investing further jacked the boom in the stock market investment.

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Advantages and Risks of Stock Market Investing

Stocks are longest type of investment you can purchase. By investing in a company’s stock you are actually buying a part of the company’s future and its future profits at the end of the business in all probability. Studies have shown that long-term investment in common stocks have outperformed all other investments including bonds, shares and term deposits. Therefore a majority of investing population invests in common stocks through mutual funds and individual companies.

Most people invest in stocks with the help of tips from experts and friends, advice from analysts, and phone calls and emails from brokers. No matter from whom you take tips and advice, you as an investor should be aware of the benefits and risks in stock market investing. There are several risks which you are most likely to encounter as ways to reduce risks associated with investing.

Being aware of the fact that risk is synonymous with investment in stocks is probably the first big step in stock market investing. Some of the distinct disadvantages which one should be aware of are:

  1. Neither the company issuing the stock or the government can guarantee you the returns on stocks. In many instances your actual revenue can differ widely from what you had expected. Probably, you had expected the price of the stock of a particular company to increase but much against your expectations the prices could fall sharply.
  2. Like all owners, as a stockholder you would be the last one to get paid. A company first pays its employees, creditors and suppliers and pay taxes. Only at the end are profits distributed among its stockholders.
  3. As an investor, you might not be aware of the full details and the current financial situation of the company. Limited information of the company can make investment decision go awry.
  4. The most important risk is the continual adjustment of the price of a stock to fresh information entering the market. This is known as ‘idiosyncratic risk’.

Common stock has the advantages of a desirable investment option. The very risks involved in stock market investment also make it a very profitable investment.

  1. Unlike bonds and term deposits it has the potential of huge gains. Some even benefit from ROIs or annual returns-on-investment on a regular basis. The general return that you can expect from long term stock investing is 10-12 %.
  2. Modern day internet has enabled people investing in stocks to have a more personal and direct access to the financial future and the need of dependence upon brokers have minimized. You can access market data and instant analysis and take control of things immediately.
  3. Stocks are liquid and therefore they can be bought and sold immediately at a decent price.
  4. Stocks provide with legal liability and therefore passive stockholders who are not responsible for running the company are protected against any liability arising from the company’s actions.
  5. Historically stocks have given high returns compared to other investments.
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