Investment in Stock Market has been one of the most popular forms of investment. One important element of investing in Stock Market is its invariable exposure to risk of return on investment. Every Stock for that matter is exposed to risk. You can gain on your investment and you can loose on your investment too. Also there is a third type of risk involved in Stock Market Investment and that is the risk of non-performance of your stocks.
Many of the investors find that the stocks they are holding in anticipation of good returns have not really appreciated at all and have stayed at the same price level at which they had bought or still badly have depreciated in value. So it becomes important to know and to be aware of the reasons which have caused your stock’s non-performance. Is there something you can do to avoid this type of situation?
Managing your stock portfolio is thus of prime importance. So here we put before you some of the key reasons of “Why My Stock’s Don’t Perform?”. You will get an overview of the causes of the failure of your Stocks and thus you can avoid those mistakes in your future investments.
No Research
One of the main reasons of your Stocks non-performance is that the stocks that you hold in your portfolio are selected without doing a prior and thorough research. Stock Investment is not a blind game. You need to purchase a stock after a proper study of the company and its past performance. Also you need to have an awareness of the present market conditions.
See for example, it is our normal behavior that we purchase any kind of goods or articles after doing a proper research. Suppose we want to purchase a Smartphone. We usually search thoroughly for the latest and most advanced set available in the price band according to our budget. We search for iPhones and the likes of Samsung Galaxy, test their features and then select the one which suits our taste, requirements and budget.
Likewise a research is needed before investing in a stock also. It would not take much of your time. Sometimes an hour of study would be enough. There are numerous websites on the Internet which do provide relevant and reliable information about various stocks being traded in the stock markets.
Also, one of the factors linked with market research is that if you have purchased stocks at an all time high and market conditions are such that they are not favoring a further increase in the Stock prices, then it is quite possible that the price of the stocks linger at the level at which you had purchased them. In such scenarios it may seem to you that the stocks are not performing but the reality is that only their prices are not increasing for the time being. You need to stay with the stocks rather than opting for selling them immediately.
Diversification
Secondly, to avoid the condition of stock’s non performance you can follow the golden rule of “Stock Diversification”. It is always better to adopt the policy of “never put all the eggs in one basket”. If you have invested in only one type of stocks then you are always at risk. If for instance the stocks you have purchased underperform then you are surely going to face losses on your invested sum. Purchasing different set of stocks can save you from such a situation. You can minimize your losses and thus the risk of investment in Stock Markets through Diversification of Stocks.
Sometimes it may also happen that though the market conditions are good still the prices of your stock may stagnate around the level at which you had purchased them. This may happen due to the reason that the stock has been ignored by the major and big investors that are instrumental in moving the prices. So in such circumstances it is advisable to hold the stocks rather than opting for selling them out as it is always likely that the stock prices may rise once it gets the big players investing in big amounts in such type of stocks. It is seen that prices of such type of stocks do appreciate.
Long Term Investment
Most importantly, investment in Stocks should always be seen as a long term investment option if you want to really profit from your transactions in stock market. Staying invested in your stocks for a long period such as 5 years, 7 years or say 10 years can give you good returns on your invested amount in stocks. Again investing for a long term can also be used to leverage against the fluctuating nature of stock prices. Long term investment in stock market can also be a good method to overcome from the stagnant or non performing stocks.
Thus we have seen that there can be numerous reasons for “Why Your Stocks Don’t Perform?”. It is always better to adopt ways and means so that you can successfully avoid such conditions from arising. We have also discussed few of such techniques which can save you from such a situation. Proper Diversification, Stock Market Research and others were among the techniques which have been discussed at length here. We hope that you have got some valuable tips for Stock Market Investment and believe that you purchase such stocks which perform and give good returns. Then “Why My Stocks Don’t Perform?” would never be the cause for worry for you.
