Tuesday, September 21, 2021

How you can manage and learn to invest in the stock market

 No option to fall, manage and learn to invest in the stock market

How you can manage and learn to invest in the stock market
How you can manage and learn to invest in the stock market

 No option to fall, manage and learn to invest in the stock market

Some parents place their children under too much protection. Parental vigilance is also very natural and natural for children. But it is also true that children who are not allowed to be exposed to risks in the name of safety can grow up to be very weak in coming out of difficult situations. 
This means that parents have to balance protecting children and allowing them to become lessons. This can be the correct investment. And the capital market regulator also has an obligation to leave so much scope in the rules that instead of scaring new investors, they should also teach them a lesson and attract them for investment.

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Investors get the best learning from their experience. But there are some investors who need to be protected from risk. A few days ago I joined a news channel debate show. Somehow the topic of the debate became whether equity investors should be treated like young children.

Apparently, it was not about chocolate or ice cream. It was about whether equity investors needed to be protected from the risk arising from the consequences of their move.

SEBI has announced some new steps. This will eliminate margin trading in the cash segment of the equity market. However, the traditional brokerage industry has criticized SEBI's move.

Most people who are related to the industry say that this will reduce the amount of buying and selling by retail investors and will also affect price discovery and liquidity. Its direct effect will be seen on the trading volume of brokers who buy and sell in physical form offline.

It is quite possible that all these things will come true. But this is not the most important factor on which to make a decision. Importantly, during two-three months,  there has been a big jump in the share of retail investors in equity trading. This thing has also attracted the attention of SEBI. This includes both new and old investors.

A few weeks ago I referred to an interview with SEBI chairman. In this interview, the SEBI chairman had expressed concern over the spurt in retail investor activity in the equity market. This means that the recent steps SEBI has taken to end mass trading are a response to the spurt in retail investor activity in the equity market. What's more, this was continuing for quite a while. 

Personally, I accept there are two unique issues here. One is an equity investment and equity trading, and furthermore, the other is influence. Talking to investors for the last 25 years, I have come to the conclusion that most of those who are trying to make money by investing directly in trading or equity, will gain from their awful encounters.

There is no option to learn from your experiences. The thing to note is that I keep myself in the same category. The truth is that you can learn and read how many theoretical things, but until you do not make some bad decisions and do not make losses because of this, you do not know every little big thing related to investment. For example, children play and get injured themselves, only then do they know what to do and what not to do.

In a way, when parents try to protect the children from these dangers too much, they harm the children. The reason for this is that children who are under too much security grow up without facing difficult situations. And the result of this is that when these children grow up and get caught in difficult situations, they are not prepared to counter it.

On the off chance that you take a gander at it as far as speculation, it means that you should experience market fluctuations and losses in a short period. But it should not be so much that you should be wasted and avoid investing. This means that there needs to be a balance between too much rule-of-law and insufficient rule-of-law.
The right way to curb leverage that retail investors can take. Increasing profits by borrowing money from brokers is a great way to attract new investors. Who does not want to earn profits to become big? But the reality is that prudent investors know that big losses can happen at any time and the entire amount of leveraged traders can disappear.

Those who are not leveraged traders also suffer losses but not much. This is enough to teach them a lesson. But the lesson should not be so expensive that they get out of the investment world. It tells what the rule-of-law goal should be. Most of the people who start investing in the equity market, most of them start as short-term traders. After this, they get to know better ways of investing while taking losses and learning from some wrong decisions.

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