Top Mistakes that Investor should avoid

stock market trading

Hello Today, we will talk about the mistakes that caused many stock market investors to suffer and many times they do not even know where they have made a mistake, in this post of today we talk about those five mistakes. Who you do not have to do at all,

Let's talk about the first mistake.


After starting a stock market investment, many people start losing, and this is normal because it takes time to learn and understand the stock market and it is the beginning of the mistakes that will help you to become a good stock market investor. After some losses, in the beginning, people think that the mistake is not theirs, all the fault is market, and that is to call stock market investment a speculative market, So one thing needs to be understood here, That you have to invest in the company through the stock market, not in the stock market, That means when you buy shares of a company, you become the shareholder of that company, And then the price of that stock in the Long Term tracks the company's business performance, I.e. the same as the business will perform, the share price will follow it in the long term, Fluctuations occur in the short term but follow the growth of the share price company in the long term, Understand this thing well.

As we are seeing, the Jet Airways business is performing very badly for the past three to four years, And in April they also stopped their operation, The company's business performance has been poor in the long term, Because of that, the share price of Jet Airways has also fallen in the long term, The performance of the share price depends on its under-line business performance, Whenever you invest, understand the business of that company, analyze that company, find out whether the company will perform well in the long term, so the investment should look like this.

Many people simply buy the share by the look at the past performance of the share, that is, if a stock has performed well in the last 2 years, then buy it immediately, it is a very wrong way of doing this investment, from which you should stay away and you should pay attention to the business of that company.

The next mistake that many stock market investors make is that the price of the shares which are falling continuously, keep hold them for years, In the hope that one day its share price will recover, This is a pretty cheap strategy, If you do not trust the performance of the business, it's business performance is constantly getting worse and still, you keep holding the share price of that company because you feel that in the future, the share price of that company will be recovering, Is a wrong strategy.

We see that a lot of people have a query for us that he has invested in JP Associates, has invested in Reliance Communications, almost everyone knows how these companies are fundamentals, People also know that nothing happens to these companies, yet they are holding these shares, So here you are not only raising your loss but also you are losing the Opportunity Cost of your money.

That is, you should think that if you take out the money and invested elsewhere then you will get good returns, So do not hold the share that is not consistently performing well in the hope of their share price recovery one day, And if you have invested in a good business, then don't sell it as soon as it's stock price a little bit increases, First thing is to invest only when you think any business will perform well in the long term and then hold it in the long term.

The next mistake that many new investors make especially is that they invest in those shares whose share price is less than 50 Rs, Many new investors start with low capital and that is why they think that if I buy shares of a company whose stock price is very high, then I will be able to buy some shares, If I bought a stock of a company whose price is 10 Rs and the share of that company increases even at the price of 4 Rs, then I will get a very good return. This thing is also a very wrong thing.

So we see that many new investors invest in Reliance Power, Lanco Infra, Suzlon Energy, Alok Industries and JP Associates in the company, Not because he is a confidant on his business performance but because his stock price is too low, Most people do not even know whether the company is earning profits in the last four-five years, So the share price is low so buying that stock, does not do this mistake at all.

The next mistake that many investors make is that if the share price of the company whose shares they buy falls, then they buy shares of that company and buy more So that the stock price is average And in the same way that the stock price starts falling and they started buying more shares of that company, Yes, if you think that the stock is undervalued, you are getting low prices, then it is okay, but just to make a number of mistakes to hide your mistakes is wrong. When Jet Airways' share price fell from Rs 250, all the people who had invested in Jet Airways and started buying more shares, Then the stock came to the price of 150 and then they started buying more shares, they did not see the Jet Airways business performance. They just saw the stock price, even my buying price could be average.

The last mistake is that a stock market investor must avoid is that you should analyze in-depth analysis in the business you want to invest, You can not invest in that company by simply reading the news or seeing a company's news, because no company can run on just one or two things. Before investing, you have to understand the business of that company, its product, its service, must understand many things like its Ethics Corporate Governance, the future growth of its product or service will be tested.

There was a report in some time ago that in India there are only 13 people out of an average of 1000 people with four-wheelers, in the US there are 450 people out of 1000 with four-wheelers, So when such news comes So people just read the news and take the decision our share buy or sell, After this news, many people would have invested in the automobile sector, thinking that the demand for four-wheelers in India would increase, But then the OLA UBER came and the game changed completely. Now, in the automobile sector, electric vehicles are coming, so many changes are going to happen here, So tracking all these changes is not possible for Investor, Hence the investor likes to invest in a company that immediately adjusts the change, Because things change so it's not right that you just buy them or sell their shares by looking at those things.

So this is the five mistakes that you should not do at all, see when we start investing in the stock market, it is very rare that you start to profit from the first day. In the beginning, we have mostly time losses because we are new, the market is new to us. The company is new to us. We are having analysis for the first time so mistakes happen. So need to learn from those mistakes and with the help of the same, to get better decisions later.

Hope you enjoyed this post if you have any questions relating to this post or from the stock market, you can ask us any questions by commenting in the comment box.

Top Mistakes that Investor should avoid Top Mistakes that Investor should avoid Reviewed by Yogesh Dhawan on August 05, 2019 Rating: 5

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