Investment in share market is always subject to risks and ups and downs. Market can not be expected to move into a single direction all the time. Share Market sometimes remain bullish and at some other occasions, it may crash resulting into the heavy notional losses to the investors. People generally make common mistakes when share market falls. In this article we are listing top 10 mistakes to avoid during stock market crash.
- Never sell your stocks during stock market crash due to panic. This is the most common mistake made by many investors.
- The second most common mistake during stock market crash is that people stop investing, whereas this the golden opportunity to buy very good stocks at very reasonable price.
- Third most common mistake made by the investors is that they think that market will continue to move downwards indefinitely, which is not possible. Market keep moving up and down depending upon several factors.
- Fourth common mistake made by the investors is that during stock market crash, they buy some shares of such companies which are available at very low price due to market crash, without understanding the company and its business. Never invest in a company without making full research about the company, its business and its fundamentals.
- Some investors, sell all their equity shares during market crash at throwaway prices, stop investing in share market and park all their funds in Bank Fixed Deposits and other such fixed income instruments. This is a blunder, not just a mistake.
- Most people make a huge mistake by assuming that stock market trading or investing is a gamble. This is NOT. If you make investment and trading after proper research with correct estimate of timing to buy and sell at the right price, you will never make a loss.
- There is yet another very common mistake made by many investors. They put all their money into a single stock or very few stocks, whereas the golden rule of investment is that you should make a portfolio of investment and keep the same as diversified as possible.
- This mistake is made by many investors. They borrow money for investing in share market with the hope that interest cost will be cheap as compared to the share market gains. It is always advisable for retail investors to invest only your surplus savings in stock market.
- Most retail investors make the mistake of investing and trading in share market based on the TV news and analysis, without making their own research. This should be totally avoided.
10. Last one big mistake is made by some people is that they start investing in stock market just because their friend or relative has advised them to do so. If you do not understand the stock market dynamics, then stay away from
Also Read : Sure Shot Tips For Making Profit When Market Goes Down
