SHARETIPSINFO >> Articles Directory >>Time to make money in the stock market
The stock market is an important and interesting source of income for both companies and share holders. The stock market makes it possible for almost anybody to buy stakes at a company that they know and have faith in. People who have been trading in company shares have seen it become a habit and then in many circumstances, their regular source of income. It is a very lucrative business as well for the share holder once he gets accustomed to the rules of the trade. He can see his hard-earned money growing in multiples if he is perseverant and dedicated enough. But just like every other activity that we can think of, there is a specific time to act in the stock market. So you should get the perfect time to make money in the stock market.
Elementary thumb rule
There is an elementary thumb rule which any knowledgeable investor will swear by:
The Thumb Rule for investing in the share market. This is the Golden Rule- Understand it well! Know the BULLS from the BEARS. And then, buy when the market is LOW. If for any reason it keeps showing a downward trend, it normally means that it is the right time to buy shares. Since this is the time most company shares would have taken the plunge. Remember most companies, not all of them! Some companies may show a contrary trend and may more or less remain stable or may even show an upward trend even when the market is falling. Those are the exceptions you may do well to steer clear of. As for the shares showing a ‘normal’ decreasing trend with the stock market in decline, it only means that now is the time to buy some of those shares!
Sell when the market is high. This is the opposite case scenario. Provided you have already previously invested in certain number of shares and you see the sensex rising as a trend. Normally it only means that in most probability, your shares would have also grown in value (may not always be the case, so be vigilant). If so, it is selling time galore!
Warning! When following the above thumb rule, always be ultra-vigilant and very patient. For example, if the shares that you had bought a few days ago start showing an increase in value, do not sell immediately! Wait very patiently and observe if the shares wo0uld appreciate in value any further. This display of patience will always prove rewarding as you will be waiting for your shares to appreciate in value to their maximum possible ‘high’ before you swiftly sell them. The same goes for the buying scenario. Never buy just as soon as the market plunges. Wait, because it may go down a few (or maybe even a whole lot!) points further before you consider buying. This patience will certainly pay off. There are some people who do not have enough patience and so they tend to invest everything in the stock market. This is very wrong and leads them to incur a very heavy loss. So you should try to have some patience in order to succeed in the stock market.
Know the facts
Now, assume a situation where you have bought shares for a price which you felt was competent enough. But you now find out that share prices have fallen after your purchase had been made. Do not panic and sell off your shares! Panic and the resultant hasty indecisions will only make matters worse for you! What you should rather do is wait. There will certainly come a time when the stock prices of the company you bought shares of, will rise again. So just wait patiently. Know the fact that it is impossible for anybody to time the stock market. It is a matter of absolute chance. Many factors – economic, political and even natural (earthquakes and other calamities) have an important role to play in instigating the sudden ups and downs that the stock market experiences. All in all, having the knowledge and playing it safe will surely prove rewarding and help you ascertain when it is time to make money in the stock market.
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