So, in the previous article, we discussed the investor’s mindset and how you start your investment journey in the stock market. If you have not taken sight of it, please click here.
This post will cover the real-time challenges and approaches of successful investors. People come into the stock market with the sole dream of minting money. But, hardly a few of them analyze things before getting into it.
Have you ever wondered how fund houses are able to generate a tremendous amount of lucrative returns despite handling colossal capital? People who do not have ample time always prefer to trust these big fund houses and stay contended with around 10-15% of rounded returns. But is it possible to generate good returns on our own? Can an ordinary investor turn into an ace with simple strategies? The question remains an interesting one.
Here are some of the crucial factors that give an edge to ace investors over commons;
- Trust the fundamentals: Most people who are successful as investors always trust and work around the fundamentals. They always have their analysis on top of anything else. They aren’t someone who comes into the stock market on tips or based on some recent news.
- Basics of Chart Reading and Technical Analysis: People hardly spend time reading the charts of a particular stock or an underlying asset. They blindly go ahead by seeing the numbers and, indeed, get trapped most of the time. A chart of any asset speaks volumes about it, and one who follows the technical analysis will always have an edge in this place.
- Patience to hold: Anything involving money in this world will have emotions attached. People would happily watch their screens when the assets keep moving in their favor. But once it turns against, the same people won’t have the courage to hold it. Their panic mode somehow has a minimal threshold. Most of the wrong decisions in these panic scenarios result in losses.
- Booking Profits/Losses on time: No matter how you have planned your investments, you always have a number in your mind that you want as a return. People refrain from booking their profits on suitable targets. It is never easy to predict the market’s highs and lows. But your specific targets should always be there in your mind. Once you are able to reach that, always have yourself comfortable booking profits. People often hesitate to book losses at the right instances to get out of their views that have backfired. Most capitals are wiped out in these scenarios as you do not have the right plan to exit when you hit your stop-loss. An ace investor always focuses on booking at good yields and re-investing once a proper entry is found. And that’s how big money is made in this stock market.
- Success doesn’t come overnight: One has to be prepared to walk through the roller coaster ride in this market. It will hit you hard at times and reward you big as well. Never be too emotional or too attached to things in this market. Always remember you have family and friends who will always be there by your side, without bothering about your status in this stock market. People quite often take the wrong steps after losing money here. Please think twice before doing that. Today if you are on the losing side, it doesn’t assure that you will keep losing all the bets you make. Have faith in yourself and your vision, and it will pay off.
- Learn from Mistakes: Always have a learning mindset in this stock market and record your mistakes. Keeping track of your mistakes would help you become a better investor and avoid making the same errors on any other occasion. Remember, it is always learning before earning. The crash of 2020 caught most of us off-guard, as people were not habitual of seeing such nasty downfall. On the other hand, those with a good amount of learning and experience enjoyed this period of investing more and more; as a result, the market rewarded them in late 2021 and onwards with immaculate returns. This shows the value of learning.
Markets are kind enough on occasions to reward you big. Be humble in such situations. Never assume yourself to be the only big thing here. On the other hand, markets can be cruel at times too. So, do not overthink in such situations. If you have your basics right, it is going to return you big in your favor. There’s always a tomorrow after today.
Author’s Note: Those who were looking for tips or suggestions for stocks are actually in the wrong place. We do not encourage any calls or tips on trading or investment. These articles are the sole learnings and experience the author shares based on their views. Please consult your SEBI registered advisors before making any investment decisions.