Screening and filtering different stocks based on different parameters including sustainable growth of a company is an approach that every stock trader prefers, however there are certain share market basics that you must consider for earning profits in Indian stock market.
Let us check some of the safe strategies across different sectors of stock market.
Though stocks of companies selling insurance and bonds are considered safe bets in stock market however when you seek transition of these stocks their fees are proportionally higher on lower amounts. You must check the breakdown of costs.
You might find that when you expand the selection of stocks paying more to purchase more bonds you proportionally end up paying less fees. This will in long term also gives you a higher return over longer period of time.
Regularise Your Investments
Investing in stocks a regular basis is a safe strategy in volatile markets. If markets fluctuate and your stocks price rise, your investment appreciates in value. On the other hand, if markets fall, you make less loss as you were regularly investing in different stocks and do not sell so your diversified exposure of your money absorbs the loss, and you gradually make profit again when markets rise. This is as leveraging your investment.
Segmenting the investments into smaller amount across many stocks cumulative need higher amount of investments. This also help in making huge profits. Even if 30% of your stocks make high profits, your overall portfolio looks healthy. If you are willing to invest large amount of money in the stock market, put the money in a technically analysed stocks as pre-selected investments, make a plan to do so over a period of time. This is good strategy for big companies’ speculative shares; don’t invest all your money when the stock prices go high only to lose out heavily later, when they come down as market falls. That is why buy stocks when the prices are a medium to lower range.
Safety Investment Tip for Beginners
If you are fairly new to stock trading, do not pursue big companies shares. You start with small amount. First taste the market flavour, you must get acquainted with the levers of the market. Big stocks are expensive and take time to perform over a certain of period of time. All your money must not be exposed to such high priced stocks. You need spare money to regularly invest in the stock market. That is why it is highly recommended to fulfilling your stock trading needs by investing in hybrid range of stocks; penny to medium priced shares.
You can also consider beginning with safer stock investments by targeting banking index that list banking sector stocks. Similarly, you can buy medium to small shares and stay invested in commodity index. Both banking and commodity indexes have shown better growth in last 5 years especially in Indian stock market.
There are also fairly new companies who are showing steady growth and listed under penny stocks. This way you have exposure to different types of stocks and you can regularly trade in stock market without spending large sum of money.