Question

As a beginner investor. Where should they begin? Should the focus be on short or long term trends?

Answer 1

Answer: Stock market is very lucrative investment alternative, it has higher risk but higher returns too. As a beginner investor, one should take these things in consideration-

1. A beginner investor should start with less capital that is not needed for anything else.
2. A beginner should invest the money into different stocks, he should not put all his eggs in one basket means, he should diversify his portfolio and should not invest all his money into one stock or sector so as to minimize the risk.
3. Stock market investing is subject to systematic and unsystematic risk, he should asses his risk taking capacity and accordingly invest into stocks, higher risk higher gains, lower risk lower gains.
4. Being a beginner investor, he should be patient, he should panic with the downside movements in the stock market.
5. He should invest for long term to get higher returns, once he gets the experience of market then he should be a trader for short term or day trading. Trading is riskier than investing.
6. Always put your money for investment, do not take loan/leverage from the broking company because they charge higher interest and positions are squared off if you do not have enough cash in your account.
7. He should do fundamental and technical analysis then invest before proper analysis. He should buy the stocks with good fundamentals and he should see the long term trend for long term investing and short term trend for short term investing.