What not to do if you are new to the stock market? Private investor Sergey Kulev spoke about the principles that should be followed in order not to lose money
Train your emotions
They are the enemy of any investor. In my opinion, the ability to resist impulsive decisions is at least 70% of success. Try not to look at the stock price every minute. If your investment idea does not go according to plan and the stock falls in value, first calmly weigh the pros and cons. Maybe this is not a reason to give up everything and run to sell securities at a loss. The price can then return and continue to rise, but without you. If you are a long-term investor, you need to be able to withstand the fall in the prices of your securities for a long time.
You don’t have to be an investor only on paper. Ask yourself: why did you come to the stock market? what is your main goal? Surely one of the answers will be – to make money. Therefore, it is not worth putting off real investments for a long time. First, you can create a demo portfolio for practice, but until you try to trade on a real account, you will not really learn anything.
Forget fabulous income
Advertising on the Internet, which promises you hundreds and thousands of percent per annum, is nonsense. Very often I had to hear phrases like “this paper should grow by 50% by the New Year” or “I will invest 50 thousand rubles. and in a year I will be a millionaire. ” Newcomers invested money without really understanding what they were buying, and, moreover, at inflated prices. In all cases, it ended sadly – people lost money.
Be prepared for risk and loss
Especially if you still intend to get those very hundreds of percent of the yield. Do you want to earn a lot? No question, the derivatives market provides such opportunities. But be prepared for the fact that the potential losses will also be high. To risk one ruble and at the same time earn hundreds of thousands is a utopia. If one day you succeed in this, then it will be rather luck, and it is unlikely that it will turn into a pattern.
If you are not ready for big risks, choose more conservative papers. They will not have space income, but the likelihood of getting a big loss or even losing money is several times lower. Take on the level of risk you can handle. You need to clearly decide for yourself what loss you are ready to accept, and move on if everything did not go according to plan.
Forget about robots and analysts
There is no magic pill. As well as universal trading methods. The market does not lend itself to accurate statistics, there are real people behind it. In each specific situation, you will have to look for an individual solution. Do you know how an experienced investor differs from an analyst? The first one can not only find an interesting deal, but is also ready to take the real risk of losing his money. Analysts and roboadvisers do not bear any responsibility for their advice.
It doesn’t matter which path you choose – an investor or a trader, find your place in the market. In other words, you don’t need to invest in everything. It is unrealistic to cover all financial instruments. Determine what your goals are and what is needed for this. Think about what you know best, what instruments you can trade best – and only deal with them.
Develop your own strategy
Develop your vision of the market. Each person perceives the market differently. Different methods and approaches can be spied on from more experienced investors. But it is also not worth copying someone else’s technique completely. No one can transfer their experience to you 100%. All the same, you will most likely not succeed in “exactly the same”. Therefore, you have to fill your own bumps.
Think with your head
Stick only to your opinion. Don’t follow the crowd. If everyone around you asserts that you need to buy or sell, and you have a different opinion, then analyze the situation yourself again. Who knows, maybe you are right? But trusting everyone’s opinion and blindly following everyone, you may find yourself in a situation where you will bite your elbows and repeat: “Well, I told you, I told you …” And it will be too late.
But in moderation. Better not to buy one or two papers with all the money. Even if it seems to you that your investment idea will definitely be successful, you can still be wrong. The stock market is sometimes unpredictable. It is better to buy five or seven securities, in which you understand, than 20 unclear which ones. Also, you should not invest borrowed funds – take so-called leverage. There is a good proverb: if you take other people’s money, you give it back.