Let us learn about the stock exchange business. In this article you will find points about investing in Pakistan Stock Exchange, these points are equally useful for every. Wherever he wants to start. It is basically about two types of people, No 01 who already opened their brokerage account but still, they are not successful. And 2nd for them, who are still planning to invest or have positive feedback from others.
In my opinion, there are 06 points that should consider before starting the Stock exchange business to get a reasonable return.
Important Points to get started
1- Account Opening With Stock Broker:
First of all, you will open an account with a stockbroker with the minimum required amount, like in Pakistan it is Rs.25000. The good thing is that those 25k you can use to buy your shares from the market. Do some research before opening your account, try to find the best stockbroker of the market to be relaxed in the future.
Note! There are 02 types of accounts Basic and Premium. Basic means, you can open with 25k in Pakistan, but the premium will be opened with a higher amount. In premium, they provide some extra facilities but also the deduct high commission. So, it is your choice as per your situation, that what type of account you want to open.
2nd important point you have to make your portfolio. You will start investing in different sectors, sector mean categories, for example, cement, electronics, pharmaceuticals, automobile, etc. It will give you benefits if somehow the government changes its policies for one of the sectors. At that time you will be in a safe zone with your other rest investments in other different sectors. So, it is better, if you divide your investment into 3 to 4 different sectors. 25 to 30% in different sectors;
Another important point that you should not invest more than 10% for any specific shares. Mean to say from one sector you will buy 02 or 03 different types of shares, to make yourself more secure.
3- Cash is King:
It is a reality that Cash is the king almost every business spread in the market. Use your cash carefully; don’t invest your complete capital. Keep some amount as a reserve to use it later on in your needy time. As a stock market business, better you invest your capital 25 to 30% in different sectors; and keep at least 25% as a reserve for reinvesting, managing or supporting your already purchased shares.
4- Don’t invest at once:
Here I am going to share with you a golden tip. Don’t be hasty to spend all your money suddenly in one sector, either you have a chance or tips to get a share at extra cheap price or tips about dramatically progress in some specific brand’s shares. Because the Stock market works like see-saw game. So, keep your king secure, and purchase on alternate days. It is possible that you may able to get cheaper than the previous day. This way it will be beneficial for you. If unfortunately, the share price rises, then it would become an average with the accumulation of the previous day. This technique will save you from unnecessary losses.
Whenever you take entry into the market, don’t be hurry to execute your first trade. First of all, learn about the market, take the news, watch activities, and understand the process practically. Use print, electronic and online sources to be aware and learn about the market. There is different website free and paid to check the company’s overview etc.
Yes, if there is some more than 100% guarantee news or tips about some specific brand or sector. Then you can buy their shares but in limits. Otherwise, wait at least one week to learn about some technicalities. Find the list of some important notes about stock exchange business technicalities.
What is the bid price?
What is the offer price?
When should we buy the shares?
How to buy the shares?
How to execute?
What is the commission?
What is federal excise?
What is SST? And etceteras, etceteras.
So, in my opinion, delay one week to learn all the mentioned terms and techniques. That will be beneficial for you currently and in the future. Don’t get a hurry; the stock market is the name of patience.
6- Study Market Trends:
It is very important to know about trends. In other words, learn about what is going on? For example if, some share is on 52 weeks all high, 06 months all high or 03 months all high. Then try to avoid purchasing those kinds of shares. Better try to get the shares that are going down or rising up. Also discuss with old and experienced fellows about market trends and flow of the market, mean to say do some study at your level. Which will definitely helpful for you?
Special tips to invest in the stock exchange business
Don’t be panic: For example, you bought some shares at a high price, don’t get panic, be patient. It would recover also, it might get some more time but it would recover at its time.
Money should be extra: It is better to invest your spare money only. That is spare for one or two years. Use the money that is not urgently required for one to two years. It is time taking profession. You should have to retain power. You should be strong at your heart while choosing the stock exchange business.
You will not be a billionaire: Stock exchange will not make you a billionaire. Although it happens in some extraordinary cases that someone enters the market and by chance gets some extraordinary benefits. But try to be a practical personality and strive to learn this art; money will come to you at its time.
The stock exchange business is the name of patience. I hope the above-mentioned point will definitely help you to start the stock exchange business with better understanding and confidence. Click to know about another business tip that is how to start a coaching business, if you have some special skills.