Stock Markets are unpredictable. It can be bullish at times but can turn bearish all of a sudden. This poses a lot of problems for the investors. Basically they have to undertake a lot of investment risks. Chances are that their investment yield losses instead of giving them good returns.
But do the investors invest their money in stock market for making losses?
Well, definitely not.
So is there any way out for the investors?
What investment strategy they should adopt so as to make profits?
What would be the right investment approach for the investors?
And if you too are an investor then these questions are also important for you. You have to come out with an investment strategy that assures you of good returns instead of giving you losses. Ultimately you want to gain from your investment in stock market.
Well the good news is that there is a way out for you and you can certainly look forward to making profits out of your investment in stock market.
And that golden principle of investment in stock market states that you have to wait for the falling market. Yes, Waiting for falling Market is such a market conditions that you can utilize to gain profits out of your invested money.
We will let you know how you stand to benefit by waiting for falling Market.
First of all, you have to understand that the stock markets follow a cyclic pattern of behaviour There are times when they rise and there are also times when they fall.
In our case you have to take leverage on the falling market. Your approach should be to buy the stocks. When every other investor is focused on selling the stocks, you have to rather take the road of buying your favourite stocks.
Here the logic is pretty simple to understand and implement.
When you buy cheaper stocks you increase your chances of getting high rate of return when the stock prices begin to climb up or appreciate. The difference between the purchase price and the selling price tend to increase thereby giving you high profits. And also lower the share price of a company, the more number of stocks you can afford to buy. Thus you have more number of shares and that too at a lower valuation.
Now as the next step you have to hold the stocks which you had purchased until a time when the stock prices begin to appreciate to a level which tends to give you a good rate of return. Normally this holding period can go up-to five years but it can also be as low as one year.
In this period the share prices rise considerably and so you can safely sell your stocks thereby booking high profit margin in the process.
Here, one more precaution you can take while purchasing the stocks in the falling market. What you can do is not to invest your money at one single time. Meaning, you can purchase systematically after a certain interval of time.
As you cannot predict how low the stock market can go, it is always better to purchase stocks systematically at different low prices, each time investing a certain percentage of money. You can also purchase stocks of different companies rather than investing in one single company.
The most important part of investing in Stock Market is stock research. In any market situation, one should do some stock research. Choosing the right stock is important then only stock price comes.
When you have found some good stock, and you are ready to invest in those stock wait for some time. If the market falls it is the best time to buy.,
The simple theory behind this strategy is that when you are ready to buy a stock at the price of 100 and if the market starts falling and that stock also fall to 90 then which is better buying stock in 100 or 90.
When you liked that stock in price of 100, then should fall in love with that stock at the price 0f 90 or 80. When your favorite stock is falling make sure entire is falling or not. If only that stock is falling think again and don’t invest in that stock.
Adopting such an approach of investing would protect and safeguard you from incurring losses in your investment in the stock market. Waiting for Falling Market can turn out to be a profitable approach of investing in the stock market. Then you can surely overcome the fallouts of unpredictable nature of stock market and can reap healthy profits from your investment in the stock market.