Thumb Rules of Investing in Stocks
0 Comments 
Making profits in the equity market is not based on your luck. With a disciplined and research-based investment approach, you may be able to earn high returns. In addition, using some basic thumb rules based on the experience of other successful investors will help you earn profits.
Here are five thumb rules for investing in stocks
1. Do not try to time the market
Predicting the tops and bottoms in the equity market consistently over several cycles is almost impossible for seasoned investors. In reality, most people who try to time the market lose money.
2. Take a disciplined investment approach
Historically, great bull runs have also had their moments of panic. The volatility in the equity market has resulted in people losing money even during bull runs. However, if you follow a disciplined investment approach with long-term goals, it is most likely that you may avoid losses.
3. Invest in a broader portfolio
It is recommended you invest in different stocks across various sectors. Furthermore, you must include several asset classes to reduce your risk exposure. The different types of instruments that may be included in your investment portfolio primarily depends on your risk appetite and financial goals.
4. Monitor your portfolio regularly
The stock market is not only affected by domestic happenings. International occurrences also affect the equity market today. Therefore, it is very important that you monitor the performance of your portfolio regularly and make modifications as required. In case you are unable to track your portfolio at periodic intervals due to lack of knowledge or time, taking the help of an experienced financial advisor is recommended.
5. Avoid leverage
To ensure you do not face financial difficulties, you must invest the money that you can afford to lose. It is vital that you do not take on debt for stock market investing. In case the stocks do not perform as expected, there is a huge risk of losing the borrowed money and repaying the same may have adverse results.
Stock market investing may be highly profitable. However, you must do your research and make informed decisions. Furthermore, you must never let your emotions control your decisions and be realistic in your expectations.
