Stock market investor by definition is a risk taker. Someone that is ready to lose his cash in an effort to take the risk of achieving a higher return. The stock exchange market is not a leisure center rather, an abode for the serious investor that swims with the tide. There are some things you need to know before becoming a stock market investor. Number one being the knowledge of buying cheap and selling high. As simple as it seems, it is not easy to put into practice. This because as a beginner, how do you recognize the stock that could be possibly bought low and sold high.
The knowledge of the right time to do transact is also there. These remain some of the questions in the stock market that are begging answers till now! And of course that is what makes the stock market thrilling and exciting.
Stock market investor -How to source Companies to Invest In
Real stock investors know where to search and the type for businesses to invest in. This concept is a thing that confuses a lot new investors. However, discovering a company or corporation to invest in is very logical and simple. Here is a hint, right now that you are reading this article online, who is your internet service provider? You also need to know how to put price on a business based on its previous results. You should know that individual investors have different values because they have different desired rate of return.
Stock market investor – Know your risk tolerance level
Knowledge of your risk tolerance level will give you an idea of whether to invest in stock altogether or not. Some individuals are comfortable with risk while others are not. Know yourself! One thing you really should be aware of is that stock market is a risky investment.
Stock market investor -Know the Purpose of Stock
It is also important to recognize the reason why the market exists. How can people invest in stock, when it is a high-risk business, and not know what the investment represents?
Stock market investor -Understand Why People Invest
It is very cogent that you understand how other investors in the market make money, don’t just delve into it. There are two fundamental ways through which investors earn, through capital gains and or dividends. Apart from these, you can make money in the market by making investment in stock options.
Stock market investor – Know the analysis of companies involved
Be like a bank, they research you before the invest (loan) in you. You should use this method too. You should know about the companies and corporations that are involved, what sector are they in. Having this knowledge will give you rest of mind because your investment will struggle if the industry is not growing.
Stock market investor – Know Your Return Rate
Having a fore knowledge of your profit will determine the type of stock you will invest in. By the rule of thumb, your return rate will be the determinant of the price you will pay for a particular investment (stock).