The stock market is considered as a heaven for smart investors. Those who unknowingly invest in shares are the ones who have earned too much money and want to get rid of it. Trading in the stock market and earning from it may be considered as a gamble by many but it is certainly a risk worth taking. After all, nothing in life has a 100% success guarantee.

But foolishly investing in shares of some random stock is not acceptable. When you invest in something, you desire at least modest, if not bumper, returns. So how is it that you can get the kind of returns you need? Well there are a few small things which you need to care of. Here are a few:-

1.     Be aware of the company of which you are purchasing the stocks. Information about reputed companies can be easily obtained through newspapers and journals. Regarding the other small profitable institutions, you can get the info via brokers and investment-dedicated magazines. Buy the shares only if you are convinced that the company you are investing in is trustworthy and reliable. Never go by any hearsay.

2.     Technical analysis i.e. looking at performance charts and reading Director’s reports will help decide the point of time at which you should buy a particular stock. Do not base your buying or selling on this parameter only. Knowledge, instinct and luck also need to be considered while making the decision

3.     Day Trading has become hysteria worldwide. Quick buying and selling has become the order of the day. But this trend has not been proven to give better results. Even today, going by the conventional long term investment mindset is considered more beneficial.

4.     Always remember the famous proverb- “Haste is Waste”. If you see a particular stock which you own rising in value do not sell it off immediately. Make an analysis of the stock and see if there is any scope for further rise. If you sell early and if the stock value rises, you are the one who will be at a big loss.

5.     Avoid over diversification. When you have done your homework and know that a particular set of stocks will yield you good returns, stick to them. It is always better to enter the battlefield with some plan rather than no plan.

Now, let us address another question. You have decided which stock to buy. How do you now go about buying the shares of a particular stock? Well, here are a few ways to do that:-

·       You can buy the shares at a limit price. With limit price technique, if you decide to buy 100 shares for $10 each, you will end up paying the same amount, no more no less. This saves you from any market value fluctuations during the time of buying.

·       If you expect the prices of the share to drop, you can buy half the shares you desire now and buy the other half later when the share price falls.

·       In the Dollar Cost Averaging Method, you buy shares by investing a particular fixed amount every month. Thus, if you are paying $100 a month for a $10 each stock, you get 10 shares. If the share value falls to $8 each, you get 12.5 shares while if the share value rises to $12 each, you get 8.3 shares