Share Market Tips for Beginners| Espresso

Share Market Tips for Beginners

The share market is one of the most trending topics  among people of all ages, and it is getting even more popular among youngsters. With the right approach and strategy, one can grow one’s money in the share market. On the other hand, one can lose one’s money due to hasty decisions.

Published on 03 July 2023

The share market might be puzzling for beginners due to too many investment options to choose from. A beginner can also do well in the share market with the help of the right share market tips. However, a beginner must also be cautious initially, as reckless aggression might lead to losses. In this article, we have listed some valuable share market tips for beginners to help you grow your money.

Understand the Stock Markets

Understanding the rules is the first step to success in any industry. To be a successful investor, you must understand the basic rules and processes of stock trading. You can easily understand the basics of the stock market online thanks to numerous blog articles and columns written on this subject.

In a nutshell, the stock market provides a place for  companies to sell their stocks and raise capital. In share trading, individual and institutional investors buy or sell shares in a public market with the help of the stock exchange.

Understand your Risk Profile and Investment Goals

The next share market tip is to identify your investment goals. What are you looking to achieve with investing? Either you want to grow money or save for a better future. Your risk appetite also depends on your goals. When you have understood your investment goals, decide when you want to achieve your goals. The time in the stock market is divided into short-term, medium-term, and long-term. Based on these factors, you can then determine how much risk can you face. However, a higher reward requires higher risk.

Choose Stocks of Established Companies

Beginners tend to make mistakes as they choose penny stocks, which do not have any fundamental strength and thus lead to losses. Choose a company with excellent brand value and robust businesses. This ensures that businesses will not suffer huge losses and assures you that you will not lose your money recklessly. One of the most valuable Share market tips for beginners is to keep patience while investing with these companies as they will not give you great returns initially but will fetch great returns in the long run.

Research the company properly before investing; you will see that an established company has a great past of returns and good market standing history. Most long-term investors keep their positions in established companies.

Start Analyzing Yourself

Research is the only thing that will prevent your losses in the share market. Still, many beginners miss this fundamental point due to the efforts required or lack of knowledge of the technical terminologies. If you want to start investing, research the companies in depth and also evaluate  share market to make appropriate decisions. However, you also shouldn’t totally rely on just market data. Start analyzing the market by yourself, and once you keep analyzing, you can correctly identify the market's movement.

Don't Make Decisions Emotionally

In the stock market, short-term trends are always popular, and beginners invest their money in greed for a higher return. In the long run, however, this becomes the wrong decision as share markets are unpredictable and volatile. During the pandemic, people withdrew their investments as experts predicted the economy would fall in a week. In 2022, the market was all time, and everyone was investing to generate a return. Avoid riding the market; simply focus on your goal. Once you reach there, close your position, and collect your profit.

Identify Potential Sectors

The growth varies depending on the sector as some sectors grow immensely compared to others sectors at the same time. For instance, the pharma industry peaked while other sectors kept falling during the pandemic. However, you shouldn't limit your return by sticking to only one sector, as every company is not worth investing in. Pick the top five performing sectors and their top performing companies, which have robust businesses and can sustain in a hard time.

Build a Diversified Portfolio and Reduce Your Risk

Making a diversified portfolio is an excellent share market tip for beginners. It will help you reduce your risk in the hard times as every sector never suffers losses simultaneously. For instance, a top-performing sector can be balanced by the other sectors not performing well. Diversification is a great option to be profitable in the long run.

To make a diversified portfolio, you have derivatives like futures and options. It is a sophisticated terminology that requires experience and expertise in the stock market, and beginners must follow it to get better returns.

Low-Priced Stocks Are Not Always a Good Option

A low-priced stock is generally known as the penny stock that tempted many beginners due to the potential to earn huge profits. On the other hand, the risk with the penny stock is higher as stock prices can go to all-time lows easily due to poor performance.

The Bottom Line

The share market is among youngsters one of the most talked about means to earn an extra income. Perhaps, the investing journey is not easy, but it can be made smartly with some useful  share market tips. Don't make your investing journey complex and just stick to the basics.


Chandresh Khona
Team Espresso

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