Investment mantras to be successful in stock market

We can reap rich benefits by investing in the stock market. But, we should always keep tabs on the share prices to buy and sell shares at the right time. But, we should also bear losses sometimes due to sudden fall in share prices, which we have not expected despite keeping an eye; this may be because of unforeseen circumstances. But, in the long run, we can earn profits and that will pave the way for a better future.

Hyderabad: The stock market is one of the ways to create wealth in the long run. But, sometimes we see indices falling from lifetime highs and we keep hearing the news of investors' wealth of several lakh crores of rupees evaporating. Fluctuations are natural in the market and there will be losses in the short term. We can see the future benefits only when we bear the losses. Investors need to know what to do in the face of falling indices.

We should invest in good shares when they come at a reasonable price and should be sold when the price is good. This is the main principle to earn profits in the stock market. Many people have shown interest in investing in the stock market due to lockdowns, work from home and other reasons in the wake of the Corona pandemic. One of the reasons can be said to be a reduction of unnecessary expenses and an increase in surplus amounts. As the market recovers from the fall and record highs in life expectancy, many have earned profits. But, conditions are never the same.

Russia-Ukraine war, rising international inflation, increasing RBI repo rate and increasing Fed interest rates are many reasons that are currently causing corrections in the market. In such a scenario, investors should remain calm and should not panic. Instead of a short-term focus, we should move forward with a long-term strategy. Decisions should be made based on analysis rather than emotions. We should keep in view that a bear market is followed by a bull market.

Long-lasting protection...

A bear market raises many doubts among investors. It causes fear and anxiety about losing the investment. In such cases, we should not sell the shares without profits instead we should wait for the right time. When others are afraid.. we should be the first to invest.. when others are eager to invest we should be afraid'... this is the basic principle of the stock market.

Many investors sell shares when their price falls and try to grab good shares when they are available at low prices. Shares of many large companies are likely to fall from highs to 52-week lows amid the market panic, but they recover quickly when market conditions improve. Therefore, we should invest in these companies' stocks in a phased manner.

Opt for diversity in investments

It is always better to ensure that there is diversity in investments at all stages without looking at whether the market is going up or down. Not all company shares fall at the same rate. Some shares earn profits even when the market is falling. Sometimes it can be against it. One thing we should always keep in mind is that stocks with high debt and low prices should be avoided. If these are on your list, get rid of them immediately.

Seek expert advice if necessary. Companies that are technologically advanced and have strong balance sheets should be looked at. Instead of investing in a single company, you can choose index funds and ETFs at a similar time. Investments should be linked to financial goals. Depending on the ability to bear the risk of loss and the duration of the investment, one should continue to invest in various ways like shares, bonds and real estate.

SIP is the right way...

A Systematic Investment Scheme (SIP) helps to invest regularly every month. Choose some mutual funds and try to invest a fixed amount. Through these, it is possible to invest in many different investment schemes like shares, bonds, and commodities. Irrespective of the market phases, you can choose mutual funds to invest in shares of good companies. It is possible to invest in these companies with a small amount instead of a large amount at once. This helps in averaging out the market fluctuations. If you want to earn profits, you have to continue to invest in the SIP for a long time. Only then you can reap the compound interest benefits.

Invest in defensive shares

Irrespective of the direction of the stock market, some stocks show consistent performance. In a way, these can be considered defensive shares. Identify similar ones. In general, shares of food, personal care, pharma, healthcare and consumer goods sectors operate regardless of a bear market or bull market. Try to choose good companies among these. A bear market can indeed be a bit scary. But, if you want to earn profits with investments, you have to control the fear. Choosing a strategy and implementing it is the secret to success in the market.