Indian Stock Market

Sense x and Nifty,these are the two things responsible in making many lives. The Indian Stock Market forms a part of the growing nations commonly known as BRIC nations. The other 3 nations being Brazil, Russia and China. Foreign Investors have been pumping in enormous funds in the Indian markets and getting tremendous returns. Everybody in the world market has been quoting as the ‘next big thing’ in world economy. We are well on course of becoming a superpower. What I just mentioned is just one side of the coin...If our stock market is so booming why is it that people still suffer enormous losses and lose precious hard-earned money?

As most of those following the stock market would know that we classify the traders as Bulls and Bears. Bulls who trade on the rising market and Bears who play in the declining market and they make loads of money. But if they’re making money, FII’s are making money then who is losing out?

Introducing the losing category, The Cows. The Cows mainly constitute of the common man who wishes to make some quick money as his salary is just enough to bear all the basic expenses. He is the one who wishes to elevate himself from a two-wheeler to a four-wheeler. He has been reading newspaper headlines of markets going up from 15k to 20k in no time and rues his missed chance but he decides not to wait anymore. So he accumulates his savings and takes some part out for the trading. He browses through the channels to find CNBC or ET Now and aimlessly watches everybody say that this market won’t stop now and go a long way. So he logs on to his never opened demat account and buys a few shares of some XYZ Ltd. but suddenly he sees the market decline from 20k to 18k in a few days and his stock loses a considerable percentage. So he purchases more of that stock in an attempt to lower its cost. That in a lame person’s language is called “Averaging”. He thinks its a smart move and he’ll be able to cover his cost very soon. But the market goes down further and he “averages” the stock further only to see it down and down. Again tunes in to CNBC and ET Now with the experts saying that the market will go in a worse period. So he decides to sell the stock and recover whatever little money he can after losing out so much money. And suddenly out of nowhere the market starts recovering to seeing new higher levels. And our Cow is just too shocked to even react and decides never to enter the market again.

The Indian population has loads of potential cows who lose money everyday and see their dreams shattering. On the other side are  those few Bulls and Bears who made lots of money in the ups and downs of the market. So what all mistakes did our Cow make that he shouldn’t have made

• Following the trend

Never follow the market trend. You never know which way it will turn at any time. Gain some basic knowledge about the market. Do your research and if you don’t belong to that field then consult someone who does.

• Averaging

Never average your stocks. You can average your way to bankruptcy is what I always preach. In an attempt to average you pump in a lot more funds and recovering it becomes all the more difficult.

• Not being mentally strong

Also

• Invest carefully

• Don’t follow “tips” blindly

• Don’t put all your money in at once

Also I am writing this article here as a lot of us i.e youth is attracted by the quick money funda and unknowingly become Cows who aid the earnings of Bulls and Bears. Investment wisely and earn handsomely rather than investing hastily and losing greatly.