The Stock market is a great place to develop your skills in long-term investments. However to generate profits on the stock market you need to have the right investment information. The growth of your investment portfolio depends on specific interdependent factors. They include:
- The amount of capital you have invested
- The period of your investment
- The net annual earnings on your money
To become a good investor you need to learn about basic investment tips and strategies in order to maximize on your returns.
Tips on Successful Investing
- Learn about the stock market
Before you put your money in the Kenyan stock market, that is the Nairobi Securities Exchange, learn how the market operates. Learn to ask all the relevant questions such as; What influenced the share price? How did the market perform the previous day? What are the future market expectations? The answers to these questions will give you a better understanding of the stock market and potential investment opportunities.
- Make financial goals
As an investor you should develop financial goals. When investing in the long-term securities, you should have a goal and at what point in the future you will need the funds. The goals you set should be S.M.A.R.T. Set realistic targets and seek assistance from your investment banker or stock broker. Determine what you are in the stock market for, that is do you want to enjoy dividends or capital gains? Your answer shall determine your actions.
- Have focus
Sometimes, it is wise to diversify your investment, especially as a seasoned investor. However, concentrating on two or three long-term investments can guarantee you higher returns.
- Control your impulses
Investors sometimes lose money because they cannot make wise decisions due to fear and greed. These can lead you to making consequential investment choices. Develop the discipline and patience of an investor in order to always guarantee substantive returns.
- Avoid the Crowd Mentality
If everyone you know is investing in a particular stock, it pays to be cautious. Learn not to always follow the crowd but evaluate investments on their own merits.
Strategies to Ensure Your Invest Successfully
There are three main investing strategies that will ensure your success when investing:
- Value Investing: This involves locating companies that are trading at prices below their market value. You buy the stock at the low price and wait for the market to discover the shares and push up its price. You then sell it for a considerable profit.
- Growth Investing: It involves looking for companies with great growth potential that match your risk, goals and strategy. The stocks you invest in will appreciate in value promising a significant payout in the future.
- Blended Investing: This is a combination of value and growth investing strategies. A combination of the two plus proper asset allocation, you can reap the rewards of both.
The inner workings of the stock market is something you can only understand by spending a good amount of time consulting and researching. You must be patient, focused and determined to grow. Do not be afraid to loose money as you develop your investment portfolio just be sure to learn from your mistakes and continue working towards achieving your financial goals.
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