Many believe that the stock market always yields profits and will never stop. Consequently, they keep increasing their investments in equities, which is a big misconception.
Stock market indices fluctuate, and investors should be cautious to avoid losses and secure profits. Investments that guarantee returns typically offer lower interest rates, such as fixed bank deposits, which currently yield around 7.5 percent interest.
Unlike guaranteed investments, the stock market does not guarantee returns. While a good market yields vast profits, a falling market results in significant losses. Therefore, only those who can tolerate potential losses should invest in the stock market.
It’s important to note that not all stock prices rise when the market is on an upward trend. Conversely, most stock prices are affected when the market falls, with some falling rapidly.
When investing in stocks, it’s crucial to assess the attractiveness of a stock’s price rather than just the market index performance.
Many people show interest in investing when the market is profitable, but they often overlook the rapid decline in share prices when the market falls, leading to heavy losses.
To mitigate this risk, shares should be purchased at a low price and sold at a high price based on a thorough analysis of future possibilities.
Ignoring short-term market fluctuations is advisable, as historical data shows that the stock market has provided higher returns in the long run than other investment instruments.
Selling shares at a loss when the market falls is not the right approach, as the market has recently experienced significant fluctuations.
It’s essential to focus on long-term investments and not be swayed by short-term market movements. Certain stocks consistently perform well under any market conditions and are worth considering.
Global events, such as country tensions, elections, inflation, and interest rates, directly impact the stock market. It’s crucial to monitor these developments and continue investing at all stages of the market to increase the likelihood of earning profits in the future.
Assessing company shares’ real value, growth prospects, and current price is essential when choosing them. Buying shares at a low price is advisable, but excessive diversification in the investment portfolio should be avoided. Financial experts recommend allocating 50-60 percent of total investments to equities and the rest to fixed-income schemes.