What are some secrets of making money in stockmarket that successful people know and others don’t? - Letsdiskuss
LetsDiskuss Logo
Gallery
Ask Question

Brijesh Mishra

Businessman | Updated 07 Aug, 2018 |

What are some secrets of making money in stockmarket that successful people know and others don’t?

Anonymous

@lets | Posted 17 Sep, 2019

Do you want to become like your favorite successful investors like Warren Buffett, Charlie Munger or Peter Lynch?

Did you ever think why these great investors are different from others?

Because 

They are all experts in finding stocks and have made a lot of money in a few years with the successful traders strategy. In this answer we will tell you some top secrets used by the successful investor: 

They think for the long term with huge patience
Do not let yourself get confused. First, decide whether you want to become a trader or an investor and then decide the period of investment. 

A trader holds stocks till the short term of high performance, whereas, Investors invest their money for some years, decades or for an even longer time. 

They never fall behind the fake tips

Do research and analysis of a company yourself. It is dangerous to invest by relying on the small information received. Of course, some tips prove to be better if you are lucky, but sometimes these are very painful. Use solid and accurate data to predict future events, what will happen in the future means a lot to us. Never make any assumptions. 

They have the risk management ability

See, there is a risk in everything you do in life. Successful investors understand that the probability of success and failure in risk is 50:50. To save some tax, a normal trader holds the stock and takes advantage of the lower tax rate, as a result, profit is reduced.

They never tempted by cheap stocks

A company with cheaper stock is more likely to be riskier than a company with a higher share price tied to more regulations. 

They believe small companies also have potential

Thousands of small companies also have the potential to become big blue-chip companies in the future. Here it is not suggested you should include small-cap stocks in your entire portfolio. Rather understand that there are many good companies out there that are out of the SENSEX or NIFTY, thus lesser-known companies with big profits are ignored.

At a final note, if you devise your way, then stick to it with discipline. Constantly changing strategies make you looser and most successful investors avoid this.

Preeti Taneja

Entrepreneur | Posted 07 May, 2018

One thing that I have seen profitable traders/investors always do and newbies don’t is taking (calculative) risks. A regular, new trader would rather save the money in the bank than go for some risky investments. On the other hand, a successful trader often doesn’t mind getting into such dicey avenues. They don’t mind taking any risk. And at the end of the day, this is the biggest difference-maker between these two groups. It’s also the biggest secret. 


So, if you’re looking to make more money in stock market, you must be ready to take necessary (and often essential) risks. The more risks you take, the more money you can make. Now here’s a thing though. Taking risks just for the sake of it isn’t a right choice. Successful traders/investors don’t mind getting into high-risk, high reward scenario—but they do that only after doing thorough research, doing technical analysis, factoring various aspects of such decisions, and even consulting experts. So, you must take risk only after being sure that such move is beneficial for your portfolio and will unlock bigger rewards in the future. 


Another thing—here’s a general rule of the stock market: never invest your money that you cannot afford to lose. Successful people invest/trade big in the risky stock market because they have a lot of money and they can afford such risks. On the other hand, if you’re a new trader/investor, this may not necessarily be the case for you. You might not have sufficient fund to even invest/trade, let alone risking it to lose. In such case, of course, you should avoid getting into anything risky. This also means, first, you must accrue enough fund, have multiple sources of income and have sufficient balance to invest/trade in stock market. Get there and then take (calculative) risks.


All in all, taking risk is the biggest secret of making money in stock market, in my opinion, that successful traders/investors know, and others don’t. There are few (not entirely) secrets that profitable players know, and newbies don’t. Like starting early, planning planning and planning, learning, not blindly trusting the news, hiring a reliable consultant, diversifying the portfolio and taking things slowly. 


Good luck!