A stock is nothing but a partial ownership in the business. Consider yourself as an owner of the local restaurant. As an owner can you consider buying and selling your restaurant frequently? If your business will face a temporary downturn, do you consider selling and then buy back again while good time returns? Surprisingly in the stock market, investors are ready to trade frequently. A mere 10% rise in stock price tempts to book profit while 10% drop in stock price creates panic. The more you trade the chances of losing money will widen. If you can consider yourself as a partial owner of the business, then you can restrict yourself from frequent trading.
Before purchasing cars, expensive mobiles or television, we undergo rigorous research. I still remember, before purchasing my first car I had spent minimum 30-40 hours on the internet over 3 months, 3 times showroom visit and then continuous monitoring of car price trend. After that, I took a test drive with another friend, consulted with my family members and then purchased the car. While purchasing a stock do you conduct such rigorous research? Not only car, just consider your last purchase of any expensive electronic gadget. All of us try to collect maximum data from our friends, the internet, and other sources and then take our decision accordingly. Similarly, do you spend a fraction that time before equity investment? If investors can dedicate the same amount of time before purchasing a stock, then I would not have considered writing this blog
Before jumping into the stock market, you need to sharpen your knowledge about the stock market. This blog is dedicated for this purpose. From the next chapter onwards you can learn various aspects of equity investing in easy to-understand language with lots of real-life examples. As mentioned earlier, it is simple but not easy. More than “what to do” you need to learn “what NOT to do”. From the previous chapter and this one, I hope you have got an idea of “what NOT to do”. To conclude this chapter, I want to mention that you have already taken the first step towards "How to avoid loss and earn consistently from Stock Market”. Move ahead to the next chapters, I can assure equity investing will become much easier, simpler and rewarding than ever.
"Investment in knowledge pays the best interest.
Benjamin Franklin
