Things You Should Know About The Stock Market
October 11, 2016
How you can navigate through the stock market is not something that is taught in school or in most households. Only a lucky handful would have had someone to guide them through the process. But if you are interested you will be happy to know that anyone can learn to become successful.
Educate yourself on the matter
This is the most important step. Try to gain as much knowledge as you possibly can before you open an account in the stock exchange. If not, even common stock market terminology like margin interest rate, stock quotes, blue-chip stocks, bear market and bull market will be enough to discourage you to go on. Two reference books that will give you a sound understanding the market proceedings are; A Random Walk Down Wall Street by Burton G. Malkiel and The Essays of Warren Buffett.
Try to manage your own account
Stock exchange advisors might offer to manage your account and invest on behalf of you. They will say that they are capable of predicting market trends accurately and can make profits for you. But realistically what happens is that they rip you off. You will probably be better off without them than with them. Most advisors who are capable of making accurate prediction will be working on behalf of high profile and more affluent clients.
When you begin, have a little faith in yourself. You will neverlearn how if you never do. Mistakes will make you understand the whole process better. Just be a little cautious though, don’t go and put in a huge chunk of your income if you might need it for an emergency. The golden rule for beginners is to invest only the money you can afford to lose with no compensation.
The nominal fee of a share is not very significant
The stock quote can change for better or for worse in a jiffy.Even companies that seem to have a good hold of the market might change all at once.
Collect your profits
Make sure you collect your profits at some point. If you have huge investments in the share market then you might want to think about the taxes you may be charged on your profits. When profits are collected within a short time (e.g. 6 months) then, you have to pay higher taxes than if you collected it once in twelve months.
Do not let the stock exchange news affect you
Finally, try not to govern your decisions based on the news reports. They prime objective is to attract the attention of the viewers. So they will write a juicy report of their perspective. Sticking to your gut is the best way to make choices.