5 Important Lessons to Learn From the Markets

Sep 3

You Can Never Outsmart the Market

Detailed analysis 🧐and strategies are not enough to survive in the market. There are several other economic or geo-political factors that may influence the movement of the market. If market is flying higher due to positive factors, there is no point in going reverse and shorting stocks or indices. Conversely if the market is going down, its good to wait and watch rather than going all in. A popular saying that mostly works in the markets is that a trend🚀 may last longer than you can expect.


Its Stock Market, Not Casino

A few elements like risk management, position management, diversification, research etc. differentiate the Markets from Casino🤑. However, most new traders enter the market with a dream of overnight richness. Social media influencers add fuel to this fire and soon this fire🔥evaporates the entire capital of new traders. One needs to realize that the stock market is a business which will develop and grow gradually.


Stock Market as Primary or Secondary Source of Income?

People from mediocre business or salary class come to the market, make some money with beginner’s luck, become confident, keep increasing capital and become more and more confident😵. Ultimately, they start thinking of quitting their job or ignoring their business. But finally, the dooms days follow, and they start losing and losing till they lose it all. One may think of stock market as a primary source of income if one is profitable for at least a year (3 years would be good though🤔). Secondary sources of income are must because all traders lose in their initial phase. In fact, keep the market as a secondary source for 1-3 years.


Stock Tips Will Burn Your Fingers

Relying on stock tips from friends, news sources, or social media can be risky. Most tips are randomly picked without any research. Blindly following them without conducting your own research would lead to poor investment decisions and must financial losses. Most people have time⏳ constraints, but they must first learn the market nuances by using small capital and making small losses. Improve their knowledge for at least 3-6months and then go for some reliable advisory service. Do your own research on their tips rather than blind👩‍🦯 faith.


Your Portfolio May Lag in a Bullish Market

Rising market would not always lead to rise in your portfolio. Your portfolio performance may still be stagnant👎 even when the market is up by 15%👍. It all depends upon the performance of your stocks. Its always good to keep blue-chip or good midcap stocks in your portfolio. Generally, they will perform in-line with the indices. Investing in penny stock hoping for a lottery might be highly disappointing and may lead to further worst decisions in future. Self-education📕 is the best investment.

I hope this small effort would help some new traders.
All views are personal.
Keep boosting 🚀for more educational content in future.