10 common stock market mistakes - Which you have to avoide

                  Stock Market Mistake

Everyone wants to invest in the stock market and want to prosper from it and tries to predict market and will lose a lot of money in the stock market. Therefore, today I discuss with you some of the mistakes that an investor should not make while picking a stock.

List of the 10 common stock market mistakes which are done by beginners are mentioned below:-  

1). No Basic knowledge 

It is one of the most important reasons why a person fails in the stock market because they directly start investing in stocks without any basic knowledge about it. It means the don't know how the market works? How price of a stocks fluctuates? When to buy? And when to sell a stock?

#tip1): - Research about the stock market, before betting on stock price and always start with a small amount of money after research, if you are a beginner

Best videos for beginners :-
                     A).   In English
                     B).     In Hindi

2). Buying on Recommendation

 Most of the people make this mistake, that they buy stocks on Recommendation. Believe me, no one in the whole world will know a stock price goes up or down, So don't follow anyone blindly. Sometimes promoters of the company use the strategy to publish wrong news in the newspaper or news channel to increase the share price, so that they can sell their share on higher price. So, always check a stock before investing in it.

#tip2):- Investigate a stock, before invest in it.

3). Buy Shares on Credit

Most investors use the wrong source of funds (such as credit ) to invest in stock market. They talk when the share price goes up, they sell the stock and pay off their debt, but what will happen if the price goes down.

See the below example :- 

Example :- a). Share(quantity) :- 1000
                          Price :- Rs 100
                          Share worth :- Rs 100000
In this case you buy shares with you own saving, in this case you can lose money upto Rs 100,0000 which is

Money (loose) = 100,000÷100,000 × 100
                           = 100 %

b). But in this case you use Rs 10 as a saving and Rs 90 as a debt and the quantity of share is 1000

Money (loose) = 90,000÷10,000 × 100
                           = 900%

#tip3) :- don't us debt to invest money in stocks

4). Short Term Trading

This is the most common mistake usually made by beginners to get quick results. I am not saying that short term trading is bad, but it cannot make you rich because compounding does not work properly in short term . So follow strategy of value  investment to make your fortune.

#tip4) :- Always go with value investing, to create your huge fortune

5). Not Diversifying Risk

Most people make this mistake because due to absence of large amount of money, people usually invest all of his money in one company to increase their ROE but it is the most risky way because if the company is not doing well then you can loose all of your money. So, you always invest your money in 5-6 different companies so that the risk can be reduced.

#tip5):- quality is always greater than quantity, not put your all eggs in one basket.

6). Not Understanding industry

In most of the case people generally invest in those companies which they don't understand even they don't know how they work. So don't invest in any company without knowing following factors such as. How industry works? Competition in industry? How companies work?

#tip6) :- first study the industry, before investing

7). Emotionally connected wit stock

Most of the investors become emotionally attached to the stock in that they don't understand the fluctuations in the stock, even they do not understand that the performance of the company is deteriorating day by day and it is the best time to sell a share and if it is not sold yet then it cause huge loss.

#tip7) :- don't emotionally connect any of your financial assets.

Thank you
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