Stock Market: Top 5 Principles to Follow While Investing

By P. Neelakantha Achary: Most of the investors don't follow the principles before investing into the stock market. There are no rules for investing, these should be considered as golden principles of self regulation. So that, one should not lose hard earning money in the stock market.

Investing in stock market requires sound knowledge about stocks, companies and a bit of knowledge on financial reports and analysis. That does not mean a person without knowledge can't invest money. Certainly anyone can invest money, but getting profit out of its required their understanding of the market function and companies financial health.

Here are top five principles one should follow before investing into stock or equity market.

1) Invest only Surplus Money into Markets: Lots of investors do ignore this principle. They do try hard to get huge return from their investment with putting all the funds they have. That is simple disastrous for them since market are more volatile. And, in that scenario it would not guarantee a fixed return from the investment. For this investors do need to have some surplus fund, so that they can bear the shock if the market tumbles.

2) Manage you Time to Track: Some investors want huge return but reluctant to spend ample time to track the market activities. It is very important for investors to cater as much as time tracking the performance of their stock,they invested. Without this, they may suffer huge loss. In fact, investors need to be very cautious about the stock.

3) Avoid Emotions While Investing: Investors need to control their emotions while investing. An emotional approach in investment could lead to severe loss. Most of the people do not control their emotions while investing and suffer loss. In realistic approach and proper analysis could give the better result. Company’s financial statement should be taken into consideration while investing into the stocks.

4) Have Realistic Expectations: One should take control on his/her expectations from the stock market. The fact can’t be denied that markets will not be positive all the time. Trading involves risk so one shouldn’t expect much from market. One can’t have win-win situation always.

5) Learn Fundamentals & Technical Aspects: Simply investing in stock market is wise but sound knowledge is necessity. One should deal properly with the jargons. Those will be there always to puzzle investors. If the word ‘technical analysis’ is bothering you, just wait don’t investment into the market, rather go at class to learn some fundamentals.

Be ready with all the details about financial markets and fundamentals of stock market. One can year very hefty amount from stock market but in long-run and following best practices.

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BSE Sensex This Week

On Friday, a benchmark index of Indian equity markets, the 30-scrip Sensitive Index (Sensex), on Friday provisionally closed 247 points or 0.87 percent down. NSE Nifty fell by 63.20 points or 0.74% at 8,526.60 points. On Thursday, Bombay Stock Exchange Sensex closed 134 points.On Wednesday, Sensex gained 313 points.On Tuesday, the BSE Sensex shed 230 points.On Monday, the BSE Sensex closed flat — just 43.19 points or 0.15 percent down.

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Greek Crisis hits Indian Stock Market

The trading session on Monday, the first day of the week, was not favorable for the investors as the Indian stock markets were seen in much volatile. The major reason for the volatile and bearish nature of trading was Greek crisis.

The Sensex of Bombay stock exchange was ended 166 points down and in intra-day trading the index was seen diving by 560 points. The weak global sentiments had weighed high on Indian stock market yesterday.

Greece Prime Minister declared Bank holiday, shutdown of banks for a week, as per recommendations made by the Central Bank of Greece. This move rattled investors across the world, but the Indian stock market fell heavily in the intra-day trading. It was the bankex that suffered most loss due the impact of Greek crisis or bank holiday in Greece. 

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This Week: Sensex at 29,000, gains 4.11% and NIifty @ 8, 800, gains 3.78%

The BSE Sensex and the NSE Nifty continued the bull-run during the week and ended above 29,000 mark and 8,800 level respectively also marking the all-time highs for both indices on sustained capital inflows amid positive global sentiments.

Positive investor sentiments over Indian stocks saw the foreign participants liberally buying out shares. Even glitches because due to Chinese market slump amid authorities curbing speculative lending, were sidelined as domestic market garnered whopping 1,156.45 points during the week.

The week saw sentiments getting bolstered by IMF’s projection about Indian Economy growth rate till 2016. Also, stellar corporate earning and government budget date announcement leading to hope of more reforms coupled with European Central Bank (ECB) higher than expected stimulus announcement of 60 billion Euro a month led to massive rally across the globe. ECBs stimulus announcement is dynamic for emerging India as it may result additional fund flows.

The benchmark S&P BSE Sensex rallied to a life time intra-day high of 29,408.73 before settling at record of 29,278.34, gaining 1,156.45 points or 4.11 per cent over the preceding weekend close.

The NSE Nifty surged 8,866.40 mark for the first time and ended new mile stone at 8,835.60, gaining 321.80 points or 3.78 per cent.

Barring FMCG segment, healthy buying was witnessed in sectors of Capital Goods, Metal, banks, Healthcare, Auto, Consumer Durable, realty, IT and Oil & Gas.

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