Stock Market Investing: 21 Do’s And Don’ts To Consider

stock market investing

If you closely adhere to the dos and don’ts of Stock Market Investing, making money with stocks is straightforward.

However, the majority of investors do things in the market that they are not supposed to do, and vice versa, due to a lack of financial education.

For instance, the most important thing when it comes to making wise stock investments is to “not speculate,” but rather to act only after conducting adequate research.

Nonetheless, without doing any serious research, the majority of stock traders speculate and wager that the share price will rise in the coming days.

The following are some stock market investing dos that every investor ought to abide by:

1. Obtain Education

Probably the most applicable stock market investing dos and don’ts is this one. If you’re serious about becoming a profitable stock investor, get to know the market.

It does not imply that you ought to apply for a degree program or attend college. The most effective way to learn is by yourself.

To learn more about the market, you can access a wealth of free information on the internet.

Additionally, you can sign up for a few quality online stock market investing courses to give yourself a head start.

Now let’s start learning.

2. Begin Small

You won’t jump in eight feet of water if you’re just learning to swim, right?

In the same way, start small when making your first stock market investment.

Start with the smallest possible investment and raise it gradually as your knowledge and self-assurance grow. 

3. Start Right Away

We can’t stress how important it is to start managing your finances as soon as possible. When you invest early, time is on your side.

Furthermore, even if you incur some losses at the beginning of your investing career, you will have ample time to recover from this situation. 

4. Do Your Research Before Investing

People often fail to make money from stocks due to insufficient initial investment efforts.

To avoid regret, investors should research a company’s fundamentals, financial statements, ratios, and management.

Using a web scraping tool can help extract necessary details.

Motley Fool vs Zacks offers easy-to-understand stock picks for new investors.

5. Put Only Surplus Into Investments

The stock market offers a fantastic chance to profit from investments in the businesses you like. Nevertheless, no profits are assured in the market, and there are always some risks.

Furthermore, a bad or bear market can frequently persist for years.

Consequently, even if you are unable to withdraw the money, you should only invest any extra cash that does not negatively impact your way of life.

6. Establish A Goal For Investing

Having a goal or plan for your investments makes it easier to plan them and track your progress.

You might want to create a retirement fund or a corpus of Rs. 10 crores over the next ten years. Setting and achieving unrealistic goals will help you stay motivated.

7. Construct A Portfolio Of Stocks

It takes more than two or three stocks to consistently make good money in the stock market. You must assemble a winning stock portfolio consisting of eight to twelve dependable stocks.

That being said, it’s extremely unlikely that you will discover all the great stocks to buy at once.

But you can keep adding and subtracting stocks year after year to create a solid portfolio that will support you in achieving your objectives.

8. Calculate Average

Timing the market is difficult, and buying a stock at the exact bottom and selling it at the top is nearly impossible.

You may be fortunate if you’ve succeeded. Buying and selling in “steps” is a better strategy in this case (unless you come across a fantastic opportunity that the market occasionally offers).

9. Expand Your Horizons

“Avoid putting all of your eggs in one basket.” Compared to a portfolio of ten stocks, investing in a single stock carries a far higher risk.

In the latter case, even if one or two of your acquired stocks begin to perform poorly, it might not have a significant impact on the complete stock market portfolio that you hold.

You should have a sufficiently diversified stock portfolio. 

10. Invest With A Long View

It is well known that all of the seasoned stock market investors who have amassed enormous wealth from stocks are long-term savers.

But why does wealth accumulation result from long-term investing?

The eighth wonder of the world is possible due to the power of compounding. Consider making long-term investments in the market if you want to amass enormous wealth.

11. Remove The Losers, Keep The Winners

Hold your winning stocks longer to allow them to offer even better returns, and cut your losing stocks if they continue to underperform. This is the golden rule of investing, and you ought to abide by it.

Additionally, maintaining your winners and trimming your losers will support the development of your ideal portfolio.

12. Make Regular Investments

When the market is performing well and the indexes are hitting all-time highs, most people get enthusiastic and jump into the stock market.

However, you will never find great opportunities to choose inexpensive stocks if you only invest during bull markets and leave the market when it is down, that is when stocks are selling at a discount.

Don’t make market investments for a single year. If you want to profit handsomely from stocks, you should invest regularly and raise your capital once in a while.

13. Be Patient

It typically takes 1-2 years for most stocks to provide investors with profitable returns.

Furthermore, longer performances result in better performances.

When making stock market investments, exercise patience and refrain from selling your stocks too soon in order to satisfy your immediate needs.

Successful Stock Market Investing Don’ts

Stock Market Investing Don’ts

The following are some stock market investing don’ts that every investor ought to focus on:

14. Never Think Of Investing As Betting

I’ll say it again plainly: “INVESTING IS NOT GAMBLING!”

Avoid purchasing any stock at random and expecting a double return within a month.

15. Don’t Make Blind Investments Using Free Advice Or Suggestions

BUY/SELL calls will start appearing in your free phone messages as soon as you open your trading account.

But keep in mind that nothing in this world is free.

How come someone would send free tips for multi-bagger stocks to an unknown person?

No matter how good-sounding a free tip or recommendation sounds, you should never invest blindly in it.

16. Avoid Setting Unreasonable Expectations

Indeed, a lot of fortunate people in the market have seen their single investment grow by 400–500%.

The truth is, though, that rumors of this nature spread rapidly and become exaggerated.

When making stock investments, keep your expectations in check.

In the market, a return of 12–18% over the course of a year is deemed favorable.

Furthermore, you will receive far larger returns when you compound this return over a number of years as opposed to 3.5% interest on your savings account.

Furthermore, avoid assuming that you will make the same amount of money as others who may have amazing skill and have been investing in stocks for many years.

Similar results are also attainable, but only with sufficient training and experience.

17. Avoid Overtrading

You constantly have to pay the brokerage and other fees when you trade frequently.

Don’t buy or sell stocks too frequently. Make decisions with confidence and only engage in transactions when required.

18. Never Go With The Flow

Within a year after buying an equity, your colleague saw a 67% return on their investment.

He’s bragging about it now, and a lot of your coworkers are purchasing that stock.

How would you respond in the next situation?

Must you purchase the stock?


Following the herd in the market will not lead to significant success for any investor. Instead of just following the herd, conduct your own research.

19. Avert Psychological Traps And Biases

Numerous physiological biases exist in the investing world that can negatively impact your ability to make wise decisions and your ability to make investments.

Confirmation bias, anchoring bias, buyer’s remorse, superiority trap, etc. are a few examples.

Since the majority of these biases are ingrained in human nature, it may be challenging for some people to recognize them.

In any case, being aware of these biases can help you prevent any significant harm from them.

The good news about these biases is that, with practice and effort, you can overcome them, just like any other habit.

20. Avoid Taking Needless Risks

It is never wise to put all of your money into a hot stock or industry in the hopes of earning a slightly higher return.

Getting high returns is not more important than protecting your money.

When it comes to stock investing, you should never take unwarranted risks and you should always balance your “risk-reward.”

21. Avoid Making Emotional Choices

Because of the complexity of the human mind, a wide range of internal and external factors can influence the decisions we make.

When making stock market investments, avoid making snap decisions.

Regardless of your personal preference, investing in a company that lacks profitability and bright future prospects may not be the best course of action.

Remain detached from your emotions when choosing investments.

Related Content: 21 Ways To Make Money Online

Final Thoughts

We attempted to go over the dos and don’ts of novice stock market investing in this post.

But remember, this is merely a guide, not a manual.

When you begin investing on your own, you will gain more knowledge about dos and don’ts from your own experiences.

We hope you find this article on the do’s and don’ts of the stock market helpful.

Happy investing and have a wonderful day!

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