Don't invest into stock market if..

 In recent previous blogs, I have shared some benefits of investing in the stock market, including income from price appreciation, and dividends. But does that mean you will always make money from the stock market? There are the possibilities that you will gain profit most of the time but not every time. Here are some precautions to take while investing in the stock market.

1. Don't Invest if you don't have money to lose - The stock market is subject to investment risk, so never invest the money you cannot afford to lose. If you have saved money for emergencies, don't invest. But when you are saving for the purpose of investment then only invest it.

2. Don't invest in individual companies - The stock market is consist of different sectors, i.e Banking, Technology, Energy, Automobile, etc. There is a probability that one sector will rise and another will fall. Therefore investing in different companies helps diversify the portfolio.

3. Don't invest money if someone said you to invest in a specific company - Many investors are dependent on others' opinions or so-called TIP to invest. They say buy  X company for these rupees and you will gain returns of 200% in 2 months or 3 months. And we end up losing our hard-earned money. Therefore self-analysis is the most important factor in investing.

4. Don't invest if you cannot Wait - Stock Market tests patience, everyone is waiting for their target price to hit. But there are many investors who panic when the market falls even 5% to 10%! How one can expect 40-50-100-200% returns if they cannot see the market in red for only 5% to 10%? If you don't have the courage to see the market in red, then you must avoid it.

5. Don't invest if you don't have any Plan - While investing any money into any company you must have to be aware of the entry and exit price. When you are investing money you must have a plan that you can bear a loss of this % and your target profit % is X. And you have to exit from that position from that company rather than be greedy. 

6. Don't invest money by taking a Debt - People think we will take a loan and invest that and make profits of an average of 15% yearly and repay the amount at 8-10% interest. But do you know if someday the market crashes then what will you do? Your loan money has been lost and now you have to repay the loan from your primary income. Sounds scary right? 

So here are some important precautions to take before starting the journey of investing in the stock market. If you have any points you can add them in the comment section.

Thank you.

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