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26th Jan 2022

How to deal with stock market ups and downs

The stock market allows every investor to connect and communicate to buy or sell stocks - shares of ownership in a public company. Investing in stocks is probably the most powerful investment option. As a company's stockholder, you directly invest in the company's growth and development.

The share market today is ideal for long-term investments because investing in the stock market with patience over the years is the best way to build wealth.

Challenges of stock market

Handling money itself is a big challenge. A commoner always thinks about saving and investing in wealth management systems, and planning for the future. Some believe that the stock market is risky; others don't understand the concept. Here are some of the challenges faced by the first-time investor.

01

Lack of knowledge

Keep an eye on your goals while making an investment decision. Many investors don't know why the stock price goes up and down. All investors commit some markable mistakes in the initial stage. Please read this to know the challenges and hurdles that will come in the way as you start off on a stock market journey.

02

Unknown risks

Yes, of course! Stock market investment is risky. At the same time, stock market investment has given the best returns compared to gold and other options. Successful investing is about managing risk. The market Index Sensex and NIFTY - stock prices go up and down many times a day. Short-term investment faces more market risk than long-term.

03

Over diversification

Many think that investing in a small amount in everything reduces the risk and yields profit. But it's a wrong idea, and it is better to invest in 2 or 3 options. Over diversification reduces the portfolio's expected return, and it may take a share market investor's focus away from his highest-conviction ideas.

04

Following the crowd? Be unique

Everyone has different financial goals. Many share market investors fail to make a decision based on their knowledge. They follow others. But to take advantage of the market swings, an investor needs to build his investment strategy and follow it with discipline to generate remarkable returns compared to the crowd.

Few solutions to face the challenges of the share market

01

Set investment goals

Personal and financial goals are essential to decide where to invest. Select a long-term or short-term investment based on your goals. First, try with a low-risk investment that gains low profit. After getting familiar with the market's up's and down's, try higher-risk investments.

02

Research

Good research helps you make an investment decision to maximise the return and reduce the risk. Spending some time watching business channels and reading magazines for tips may help you. Keep observing the warning signs and growth to profit in the share market. Use some investment software to track your performance.

03

Do not invest all your money in the share market

The stock market is volatile, and it is not a good idea to invest everything in the share market. Diversify your investment outside the stock market option too. It helps you to overcome stock market crashes.

04

Wealth management systems

Wealth management is an investment advisory service that provides investment advice. They are highly-skilled professionals who manage an affluent client's wealth. The wealth manager provides the services required to manage the clients' assets and some strategic plans for their current and future needs.

As the number of investors increases in India, the need for efficient wealth managers is increasing. OAWA offers an online certification program in wealth management for students and professionals to brighten their skills in finance handling.


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