Pritam Deuskar - Why do people lose money while investing in stocks

1. Pritam Deuskar - Why do people lose money while investing in stocks?

2. Pritam Deuskar Wealthyvia - Know the business – Mostly investors tend to invest in stocks based on a tip or by just looking at the fundamentals without knowing the business, which tends to be risky as we don’t know the risk in which we are dealing with. According to pritam deuskar wealthyvia every company has their own pros and cons. As an investor we should be aware of those risks and rewards prior to the investment in any stocks. By understanding it doesn’t only mean the products but also the economics of the business like where would be able to visualize the business 10 years down the line.

3. Marriage with the stock – Post the research and understand the business, investors tend to get in love with stock and don't sell the stock even if the earnings are not improving, this will be a highly risky bet and even more risky if they don't take any action as we have a limited amount of money to invest. Under such a situation emotional intelligence is required rather than statistical intelligence. Hence it is advisable to hold the stock for 2-3 quarters and seen whether the earnings have improved than what it was in the previous quarter, whether the debts have reduced, whether the companies have been able to outperform compared to its peers, whether is able to sustain the margins, etc., if not then try to understand what is reason and how long would it stay?

4. Let the winners win – The Pritam Deuskar study says many times, when the investors invest for a long term and one or two of the stocks tends to outperform compared to the other stocks Know the business – Mostly investors tend to invest in stocks based on a tip or by just looking at the fundamentals without knowing the business, which tends to be risky as we don’t know the risk in which we are dealing with which were invested (which is normal), they sell those outperformed stocks, which is incorrect. If a stock has proved to you that it has a good future, then we should stay invested in that stock as it may be able to give you a good return in the future also. But if there is some bad news which could impact the companies’ fundamentals then we should sell the stock.

5. Invest in management and not on the trendy company – There is a saying that goes around, “Bet on the Jockey and not on the Horse” which means that you should understand the management and not the company. For example, due to the trend of 5G, EV sector, Green Hydrogen, Green Steel, etc. the shares price whose companies are involved into these businesses would go up, but this doesn’t mean that the management is also good and there is a high chance the share price will not be able to sustain at that level. Hence we should check how the management is working on things and how is the corporate governance before investing into the stock market. If you want to invest in the right stocks then Pritam Deuskar will give you the right advice, or feel free to visit wealthyvia site.

6. Diversification – As Mr Warren Buffett said, “Don’t keep all eggs in one basket”. What it means is that we should diversify the business and avoid investing in one or two companies and create a concentrated portfolio. This would increase our risk. And as you diversify, there is a less probability of losing all your money. In the stock market, the return is not confirmed in any stock but you can mitigate your risks through diversification. However, investing beyond a certain number of stocks would reduce your total return also. Hence it is advisable to invest in 12-15 stocks for investors having less than 5 year experience in markets . If you want more information, Visit Wealthyvia website.