The path to any goal oriented achievement is difficult and is saddled with obstacles. Achieving success in share investing can be compared to the obstacle race. One needs to cross many hurdles, some may no be able to clear hurdles and may give up in the mid-path, and the one who wins the first place, must have practiced hard to achieve the victory target. So is the case in share investing! One may be clear about the goal, but one can’t be sure about making a clean jump through each and every hurdle. In the volatile share market, to clear all hurdles is not an easy job
A new investor enters the share market and hopes to make a profit. Without proper knowledge of trading, enthusiasm alone is not going to take one to the path of profit.
The important issue is, you need to be clear about your goal and the method you employ to achieve it. Once you decide about the size of the capital, that you wish to invest in shares, your next step is to create a portfolio. To begin with, make a conglomeration of safe blue-chip shares that belong to different segments of the industry.
To dwell upon a perfect strategy, you need to work in close collaboration with a financial consultant. He will have lots of researched material, and depending on the size of your intended investment in shares, he will be able to guide you properly. Your strategy is important. But implementation of the strategy is more important.
Once you have the goal-oriented approach to investing, you know how much money you want at a particular stage of your life. It may be for your children’s education; to buy your dream house. A joy trip around the world! When chalking out your goals, certain questions will come through your mind.
To being with:
What are my present savings?
How much will I need for a particular objective?
How long will it take to reach the investment goal?
What should be the mix in the portfolio to reach the target safely?
Am I moving on the right track to reach the goals?
When you are put on inquiry with several such questions, your thinking process gets highly activated, and after intensive deliberations, you are likely to arrive at certain conclusions.
Be realistic about the goals and the time frame that you have set to reach it. Successful investing is riddled with many impediments, but do not get discouraged when the market does not come up to your expectations. You need to take a long term view, and the market is bound to come to terms with your expectations.
The duration of your goals, will enable you to decide about the appropriate mix of assets. If your goal is for a period of 4-5 years, go for conservative investments, devoid of elements of risks. One strategy may not meet your all goals. Frame and follow different types of strategies depending upon the nature of the goals. For each goal, think about your tolerance for market fluctuations. Diversify our portfolio and stay fully protected by setting stop loss limits for each share.
Once you decide about the goal, you need not stay rigid about the issues relating to the goal. Make an annual assessment of the progress achieved towards the intended goal. If the progress is not up to your expectations, reallocate the assets suitably. Invest more, if necessary.
Market volatility may have short term negative effects on your investments. Do not take a grim view of the situation and do not read too much in between the lines. Do not go on shifting the pattern of your investments. Market loves and rewards the one who takes firm decisions. Do no make an attempt to dig the well at too many places.
It is difficult to predict the share market as many variables impact the market. Your share market strategy needs to be a mixture of dynamism and conservativeness.