Dos and don’ts of investing in share market

There are some dos and don’ts of investing in share market which should be considered before investing in share market. Below is the list of these basic things, which can help an individual to invest wisely:

Dos:

1) Allocate your investment in various industries.

2) Keep patience in case of stock, you have fully analysed but not moving accordingly or moving with a slow pace.

3) If you have enough patience to hold the shares, and have a very little amount to invest then go for medium and small cap company’s stocks.

4) Always go through the news about company’s recent movement before investing in shares of that company.

Don’ts:

1) Don’t invest all of your money in one company’s or industry’s stock even after you are 100% sure that the particular industry or company is going to generate greater returns.

2) Don’t go for short term and try to keep your investment for a longer period of time.

3) Don’t expect quick returns from your investment.

4) Don’t put all your hard earned money at once. Keep some reserve for future opportunity.

5) Never purchase a stock in hurry, because of its increasing market price and if you want, then don’t purchase a large quantity of it.

6) Don’t be so rigid in selling a share at a price which is lower than your purchasing price because it may further go down and can make the situation worst.

7) Never purchase shares of amount exceeding your total amount^* for quick returns because if share prices don’t move according to your expectations, you will have to sell your stock otherwise have to pay interest for that exceeding amount.

• Some brokerage firms give you the option to invest more than your current amount and charge an interest rate on that exceeding amount which is quite higher than the market rate.