How to Invest in Share Market to Make Money

How to Invest in Share Market to Make Money
It is not a fluke that most rich people invest in the share market. While luck can be both made and lost, investing in shares is one of the best ways to build financial security, independence, and create wealth. Whether you are just starting to save or already have a nest egg for retirement, your money should be working as efficiently for you as you did to earn it. To succeed, it is important to start with understanding of how share-market investment works. Here we will guide you through the process of making investment decisions and put all on the right direction to becoming a successful investor.
Here we will discuss how to invest in stock market, how you can decide whether to buy stocks.
1. Establishing Your Goals and Expectations:
Make a list of things you want: To set your goals, you will need to have an idea of what things you want to have in your life that requires money. Set your financial goals: you have to understand why you are investing money and how much you are investing, define a goal according to expectations. Determine your risk tolerance: Your risk margin is a function of two variables: your power to take risks and your willingness to do so. Learn about the market: you have to spend a lot of time for share market and watch which stocks are performing well. Formulate your expectations for the stock market: it does not matter whether you are novice or professional in share market. It is most difficult step because it is a mixture of art and science. You requires that you develop the ability to account for a tremendous amount of financial data about market performance.. Focus your thinking: It is important to build predictions in some specific areas.
2. Making Your Investments
Determine your asset allocations: Decide how much money should invest in which stock. Select your investments: As an investor, you can choose to purchase stock from individual companies, such as Atul Auto, Ashok Leyland etc. Determine the intrinsic value and the right price to pay for each stock you are interested in: The intrinsic value defines worth of stocks, which can be different from the current share price. The right price to pay is generally a fraction of the intrinsic value, to allow for a margin of safety (MOS). Purchase your stock: Once you have decided how much of which stocks to buy, it is time to purchase your stocks. Find a brokerage firm that meets your needs and place your stock orders. Build a portfolio containing at least 5-20 different stocks for diversification: Diversify across different sectors, industries, countries, company size, and style (growth vs. value). Invest regularly and systematically
3. Monitoring and Maintaining Your Portfolio
Establish benchmarks: It is important to establish appropriate benchmarks in order to measure the performance of your stocks, as compared your expectations. Develop standards for how much growth you require of each specific investment in order to consider it worth keeping. Compare performance to expectations: You must compare the performance of each investment to the expectations you established for it in order to determine its worth.  Be vigilant and update your expectations: Once you have purchased stock, you must periodically monitor the performance of your investments. Guard against temptation to trade excessively: you are an investor, not a speculator.