More often than not, you will be able to define the stock market as a high-volatile space. Therefore, if you need to survive in a market that holds a chance to bring you down at any particular moment, you need to load your strategies with a lot of survival tips.
Before we get to that section, you need to be able to understand who you are in the market: do you trade or do you invest?
What is your position?
Anybody who engages with the stock market ends up in either of these two positions: a trader or an investor.
Investor
An investor is usually a person who buys a piece only after days of meticulous research with the hopes of getting long-term returns.
Trader
On the other hand, a trader is a person who is focused on gaining profit day in and day out. They buy and sell several stocks on a single day without any intention of dealing with any particular item long term.
Surviving the stock market
Keep these tips in mind while buying stocks, irrespective of your position as an investor or a trader.
Start with a low-risk portfolio
Trader or an investor, always ensure to start with a low-risk portfolio. It does not matter if you have done a tonne of research or not; entering the market and actively participating in the same makes a whole lot of difference than observing from a distance.
If you are an investor, take your time choosing the stock before buying it. You could buy in thirds or buy the “basket” to reduce your chances of incurring a loss.
Do not let any hot tips affect your decision
Once you let your fellow investing buddies know about your decision to invest, you will find a lot of people coming to you with a lot of hot tips as to which company stock will go high or which one will go down in a few days. Our advice: ignore all of them.
In most cases, you will find that they don’t trust their own opinion to invest in that particular company and only came to brag to let you know that they are quite adept in the market.
In addition, you will find several self-proclaimed stock market ‘gurus’ on social media platforms giving away their advice on the stock market for free. Our two cents: don’t take it.
Do not be quick with your broker
When people come into trading or investing, each of them has its own set of expectations. A trader looks for something with a low commission in regard to their time-sensitive trading style.
On the other hand, an investor looks for a platform that can help them through one-on-one sessions, educational articles, analysis tools, and good customer service.
Each of the platforms comes with its specific features, some catering to specifically traders, some just to investors, and there are a few that can do wonderful jobs for both of these categories. Therefore, it is essential to warrant that the characteristics of your broker align with your expectations before you sign up with one.
Disclaimer: This content does not necessarily represent the views of IWB.