Those people who are beginners in the stock market usually worry when it comes to timing of the initial stock purchases. This is because when get the wrong start from the starting point, it can greatly lead to a path that leaves you staring at very huge losses that are discouraging. However, one should not base their minds on the losing part since a clear planning will ensure that such losses are avoided. Whenever one starts investing in stock market, then they should know that time is on their side as each day counts increases their chances of reaping good returns from their investment. Over time, when you compound the returns of an investment which has been chosen carefully, they are one you can be proud of.
Avoid wasting time for nothing
Rather than wasting your precious time wondering when you should take your first shot, concentrate your mind on more important things. For instance, you should be worried about the time that you will want your money to remain in that market. There is a wide variety of investments which will offer you risk and returns of varying magnitude. Each one of these investments is also suited to a time frame that best suites it. Wasting time is the only real danger that one faces when they already have their money to invest.
When will you need the money you have invested?
The more time that you have to amass your cash, the greater the risk you shall be willing to accept. This is because even when the bad times have come, you will still have more time to wait until they are over. For those who want to get their money back after a period of about five years, they should avoid individual stocks. Others who want their money back should avoid the mutual funds and the real estate investment trusts whenever the interest’s rates increase.
When to sell
The moment you have decided what you are going to purchase and the time, then the next thing will be knowing when you will need to cash out. There are those investors who have the belief that they can just ‘time’ the right time when the stocks will rise and fall. Due to such, some people will rush to sell their shares when they think the prices are at their peak. However, this is just an investor’s mind which one must not be misled to think that this is always the case. Also, one should avoid listening to the media which could mislead on the status of the market.
The media could pay attention to just one particular index which doesn’t reflect the entire state of the stock market. Investing in stocks does not rely on monitoring the whole market but rather, analyzing the strengths as well as weaknesses of individual companies.