Investing In The Stock Market? Avoid These 5 Mistakes To Ensure Profit

Investing money in the stock market has seen a surge in India over the last few years. Due to good returns in comparison to other investment options, people prefer to invest their money here. Not everyone can make money from the stock market, as one needs to have in-depth knowledge about the market before investing the money. Many times people make quite a few mistakes, which can prove to be a disaster and one may end up losing all their money.

American investor Benjamin Graham pointed out that the biggest energy of any investor can be their own personality. He believes that human beings are emotional creatures and are not always logical. If investors are investing money in the stock market and have certain prejudices, then they will definitely end up making mistakes and lose out on their money.

Here are 5 mistakes one must avoid:

Being Overconfident

Big Bull Rakesh Jhunjhunwala once said that the market is the king and no one can rule it. Sometimes, investors get disillusioned that they have caught the trend of the market movement. They get overconfident and make investment decisions on the basis of this, which leads them to losing money.

Herd Mentality

It is natural to want to follow the crowd when it comes to investing money. Herd mentality often leads to a huge loss of money. Many people are after a stock and investors put their money in it, thinking it will yield profits. This herd mentality can create a bubble in the stock market. When this bubble bursts, it will empty your pockets as well.

Emotional Decision

When it is a matter of money, it is extremely important to make a logical, rational and calculative decision instead of an emotional one. A decision taken emotionally will lead to bad consequences. A few retail investors make the same mistake and end up losing money and suffering losses. Before making any decision, do a thorough investigation, research and only after that decide where you would want to invest your money.

Seeking Opinions Of Others

It is good to seek the opinions of others as it gives you yet another perspective. While investing in the stock market, it is best to rely on experts. Seeking other people’s opinions after investing in the stock market can create harm and may end up leaving you confused. Before making an investment, you can deliberate and have discussions and then invest.

Sticking To A Particular Share

Many retail investors stick to a single share, especially those that have given them good returns in the past. Even when the stock starts falling, they do not sell and keep waiting for a long period of time. This can be quite an expensive mistake. Always keep an eye on your portfolio shares and keep analysing them. Always remove loss-making stocks and ensure to include those stocks which will bring you profits.