Stocks

Investing in the Stock Market – Is It Right for You?

Putting your cash in a safe doesn’t make your money grow faster. Therefore, investing it somewhere is always preferred over letting them squirreling away in a safe.

Now the question is where to invest? From where will I get huge return?

Answer is simple: Stock Market, the only place which promises huge return for long-term investment. I said – LONG TERM. They have outperformed government bonds, corporate bonds, property and many other types of asset.

Making an investment is not so simple and easy. But yes, it is always a good choice only if you are planning for long term investment. The good thing about it is that you don’t need to have huge amount to start your first investment. Your investment can range from 25% to 75% of your income.

This decision always comes with a huge risk factor. First, you must be prepared to withstand the loss of money at anytime. Second, you don’t need money for at least 5 years. If you think that you will need it in near future then better not to invest in financial market.

Next, you need to know the rules of the game.

Before investment in any company, search the market thoroughly. Just sitting and noticing the stock details will never give you the true picture of the market. Go to the financial adviser who has the right knowledge about the companies up and down. Companies listed in stock market display their financial results twice a year. These statements give you more insight into company’s performance. It is dangerous to choose a fund purely based on past performance.

It is also recommended that never invest large amount in one company. Rather invest in funds- small amount in more than one company. “Using a fund avoids putting all your eggs in one basket,” says Robin Stoakley, managing director for UK retail at Schroders investment managers.

When to invest?

“You can make your first investment just before the market goes up or before it goes down” said Andrew Merricks, head of investment at Skerritts independent financial adviser. The great investors know that the best time to buy stocks is when the public is in fear of recession because most people have less money to invest during recessions and they are afraid of losing it.

Whenever and whatever is your first investment, don’t forget to make use of your individual savings accounts (Isa) allowance which entitles you to a certain amount of tax relief, including from capital gains tax (CGT).

When should I sell my shares?

It often happens that people come in stock market with the mind of buying shares at low price and selling at high. This made them sell their shares at wrong times. It is not necessary

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