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Beginners guide on how to invest in stock in 2019

There are different types of investment that different people opt for – the ones that are easy and give low returns, the tricky medium-risk ones, and of course, there are investments that also give higher returns – stocks. Investing in stocks has been one of the most exciting sources of income yet they are the most feared forms of investments, all thanks to its association with comparatively higher risks. The current scenario of the Indian stock market has done little to change this emotion.

With the continuous news of the fall in the stock market, people are more hesitant to enter this area of investment. But is their fear justified? Any investor will tell you that when the share prices fall, it is the best time to enter the market. In addition to having a higher profit margin opportunity, low-strides in the market allow you to enter the market with a small investment. While the market is tumbling, experts have been highlighting how this continues to be a good time to invest. While there are stocks that may take a longer time to recover, the market is bound to jump back in the coming months.

History stands proof that investing in stocks in times like this have yielded profits. However, most people still hesitate from directly placing their investments in the stock market. Even with market-linked investment tools like mutual funds and SIPs indirectly putting our money in the source, most of us have several questions about making direct stock-market investments. But here are a few reminders that can help us through our stock market journey!

Do your research
The biggest issue of investing in stocks has to be that everyone has an opinion. If you have discussed investments with anyone - from your cab driver to your friends and family - everyone has probably given you different advice. “Invest in banking stocks;" "don’t invest in infrastructure firms;" "invest in solar companies;" "I made losses in solar companies,” - every person has had a different experience with the market and therefore has their own opinion. However, the key thing that you need to remember is doing your own research is pivotal while investing in the market. The first step that we can take is checking the top 100 stocks in the market and understanding the NIFTY 50 shares that need your attention. Whether it is through the internet and newspapers or trusting an investment banker who has the prequalified knowledge in these sectors, it is wiser to listen to other people’s experience but continue doing your own thing.

The right time to invest
Finding the right time to invest in stocks is a struggle that everyone has been through, mainly owing to the array of advice that they have received in this sector. The idea of the right time to invest in the stock market is flawed. The reality is that for the most part, there is always one stock or another which you can invest in. The right time to invest is not universal but rather tailored based on your own return requirements and risk-taking abilities. What is more important is the time that you stay invested in the market. Staying for a long time is a great way of making better returns.

Understand the trends
If you enter the business/investment sector of news, you will find various reports on the Sensex and NIFTY being high or low and surging or crashing. However, the important thing to remember is that you are investing in individual companies (unless you invest in index funds). So, understand and follow the trends of the companies that you are invested in, and evaluate the reason behind its price fluctuations. Knowing the trends in which the market rises or falls is crucial for you to plan your investment’s actual growth.

Stick through the lows
There are various reasons that a stock may be underperforming. More often than not, global tensions and cues are responsible for price fluctuations and not the actual company’s performance. In cases like these, sticking with the company is a much smarter move to make. If you know that the invested companies are performing well, you can be assured that the prices will rise when global markets rise back.

Exit at the right moment
Even though the market is known for giving high returns, setting a goal on returns and making an exit when you reach the mark is always the better way forward. There will always be a lower price to buy and a higher profit to make but always exit when you feel that you have received the returns that you expected, and move forward from there. The regret of not waiting for a higher price is common but needs to be overcome. Exit a stock when it is the right time for you, i.e., it has given you the returns that you wanted.

Despite the market conditions, investors are ever-so-hopeful for the upward climb. And while it is never possible to always cash in on the lowest or the highest point of the stock market, now is the best time to make an entry! So begin your research and choose the funds that best fit your needs. And if you want to be extra cautious, hire an investment advisor to guide you through. It’s time to get investing!

(This article is generated and published by ET Spotlight team. You can get in touch with them on
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