Category Archives: Investing in Stocks

What precautions must take before investing in the stock markets?

What precautions must  take before investing in the stock markets?

Here are some useful pointers to bear in mind before you invest in the markets. Please read carefully, not just read it, follow step by step to get success and make your investment out of risk:

Make sure your broker is registered with SEBI or your country stack governance and the exchanges (like NSE, BSE, DOW, New York stock exchange) and do not deal with unregistered intermediaries.
Ensure that you receive contract notes for all your transactions from your broker within one working day of execution of the trades.
All investments carry risk of some kind. Investors should always know the risk that they are taking and invest in a manner that matches their risk tolerance.
Do not be misled by market rumors, luring advertisement or ‘hot tips’ of the day.
Take informed decisions by studying the fundamentals of the company. Find out the business the company is into, its future prospects, quality of management, past track record etc Sources of knowing about a company are through annual reports, economic magazines, database available with vendors or your financial advisor.

If you’re financial advisor or broker advises you to invest in a company you have never heard of, be cautious. Spend some time checking out about the company before investing.
Do not be attracted by announcements of fantastic results/news reports, about a company. Do your own research before investing in any stock.
Do not be attracted to stocks based on what an internet website promotes, unless you have done adequate study of the company.
Investing in very low priced stocks or what are known as penny stocks does not guarantee high returns.
Be cautious about stocks which show a sudden spurt in price or trading activity.
Any advice or tip that claims that there are huge returns expected, especially for acting quickly, ma y be risky and May to lead to losing some, most, or all of your money.

Above steps has to follow to secure your hard earn investment.  If you have suggestions and queries, please leave comment on this article.