Investment is a new way to save with good returns compared to traditional savings. In the previous 2 years, the number of investors in India witnessed a tremendous surge. This surge is not limited to Tier-1 city only. Now, investors in Tier-2 and Tier-3 cities also witnessed the increase. This new trend shows how investments in stock and mutual funds take over traditional savings patterns such as savings accounts and FDS. It is important to invest, if not, your savings will depreciate in the value or purchasing power. However, a rash or careless investment might endanger a person’s financial security.

If you are a beginner on the stock market, you must receive a number of suggestions such as how to invest? Where to invest? When to invest? Or which company is good for investing? The stock market is not all about when, where, how. It’s also about when not? What’s not? And not and no? Talking about errors, beginners made a mistake in the early days of investment. Here we are discussing mistakes that you must avoid in the stock market at the beginning of your investment day.

Mistakes you have to avoid on the stock market:

Invest without understanding

This is the most common mistake made by investors. The easiest approach to avoiding this is to build a diverse ETF portfolio (Exchange traded funds) or mutual funds. If you decide to invest in individual stocks, make sure you understand properly every company represented by the shares before you do it.

Invest only in companies with strong fundaments

Only invest in companies with good fundamentals; They are people who will bear the challenges of the market and outperform from time to time. Strong stocks and liquids are a good combination. Don’t invest in Penny Stock; You may be interested because they climb 5-10% per day compared to the top shares that rose 5-10% per year; You will often enter the top and then lose money.

Avoiding mutual funds / SIP

The majority of investors feel that equity is the largest investment option. However, this is not the problem. For starters, you must diversify your portfolio by investing in mutual funds or gulp. Invest in mutual funds, but make sure you choose the correct funds and strategies. Spend time and effort to find the correct management and scheme. Mutual funds do not guarantee the percentage of returns that are subject to market risk. Mutual funds are extraordinary investments if you are just starting investment.

Cheap stocks

because companies do not perform well about companies / sectors, stock prices may be low and look cheap, and comparisons with the prices of companies both can induce you. Even worse, because the nominal value has been broken down, the price might go down; The justification offered is to make shares more affordable for small investors; However, this is not true because anyone can buy one stock; The underlying goal is to make shares look ‘cheap.’

Not diversifying other typical error investments that investors are investing most of their cash in stock only one type or one company, only losing money when the portfolio decreases. Diversification distributes your risk; This ensures that if certain shares fall, the other goes up and offset your losses, keep your portfolio balanced.