The stock market is still full of drama and confusion, which makes it more appealing to investors. You should always look for opportunities to cash in your capital, regardless of market conditions. The market offers you the opportunity to purchase good stocks at a low cost. In a bullish market, you can also unload overpriced stocks. In order to succeed in the stock market, you should use a number of tactics. To be a good investor, you must stick to the basics and avoid making common mistakes.
This article serves as a basic introduction to the Nepalese stock market. We’ll go through some of the stuff you can stop when investing in the Nepalese stock market.
Make No Hasty Decisions
The majority of new investors are inspired to invest in Nepal’s stock market in order to make quick money. Prepare to face the worst side of the market if you reach the stock market with this target in mind. Never invest in a company’s stock blindly without first gaining a general understanding of the company. If you like fairy tales, stay away from the stock market because it does not go in that direction.
Don’t be fooled by noise or false rumors
Most people bet on the stock market and make decisions based on their findings. As a result, making a hasty decision based on rumors can damage your portfolio return. When someone says the crow has taken your ear, there’s an old saying that says, “It’s best you catch your ear before chasing after the crow.” First and foremost, ensure that the news and information you are getting is from a credible source. In the stock market, there is a lot of noise, so make sure you filter it out.
Borrowing at a higher rate is not a safe way to save
In the stock market, you must keep your emotions in check. Getting into the stock market is easy, but getting out is more difficult. Pouring money into a bullish market, for example, is simple because your decision is validated the next day or the next moment. The thrill keeps building, and you’re compelled to spend more and more. However, if the market’s color shifts, it will be difficult to stick to your portfolio if you are ignorant of its long-term potential. When you have to pay high interest on your borrowings while still having to bear a stock deficit, the situation gets much worse. As a result, avoid higher-rate borrowings, which would make it more difficult to hold to the portfolio during downturns.
Don’t try to diversify your portfolio too much
We’ve always heard that putting all of your eggs in one basket is a bad idea. Diversification lowers risk by compensating for losses in one or more industries. Stock diversification is always a good idea, but too much of it can hurt your portfolio’s performance. Adding more stocks to your portfolio can also be avoided.
Over-trading is not a good idea
Overtrading is not a good practice for making money in the stock market. To dramatically raise your net worth over a longer period of time, you must devote time to your stock portfolio. Being a watchdog can be a smart tactic when the stock market is volatile. It is possible to become addicted to buying and selling stocks on a daily basis. As a result, it is best to stop stock trading on a regular basis.
Bonus: Don’t Depend Too Much On Market Timing
Market timing is a technique for making stock purchase and sale decisions based on forecasting future market price changes. Making investment decisions solely dependent on market timing is extremely dangerous. When buying or selling a company’s stock, you can concentrate on the stock rather than the price movement.