February 16th, 2008 | 
Author: There are many ways to make money. Some are safe, and some risky. Some deliver average returns, and some provide good returns. But it is the investment in the stock market that provides the best returns. It is therefore no surprise to see hundreds of thousands of investors investing in the stock market.
However, all of them do not make money. Several investors also loose money, especially if they have bought the wrong stocks. In fact, the number of investors who loose money is much higher as compared to those who make money from stock market investments.
This is because stock market investments are prone to heavy risks. People who invest on impulse, or who invest without studying company fundamentals or the prevailing market mood, are the ones who are likely to make the highest losses.
Every investor must remember that the stock market is very sensitive. It reacts to changes that are beyond the control of investors. For instance, negative results announced by technology leaders may lead to a crash in the prices of technology stocks.
Similarly, a change in the export-import policy announced by the government may cause sharp dips or spurts in sectors affected by the policy change. The stock market prices may even be affected by political events like the collapse of governments, terrorist attacks or war threat.
Besides this, the market mood can fluctuate rapidly. A peak may flatten out during the course of a day’s trading. The result is that stocks bought in the morning may be valued much less in the evening. The reverse is also true. Stocks that were trading at low prices in the morning may shoot up in the afternoon. Such investments can only benefit speculators, not small investors.
The small investors must buys shares as an investment, ideally when the stock markets are in a bear phase. They should then hold on to these stocks for five to ten years, if they want to maximize returns from the stock market without taking undue risks. This can be called the wisest stock market investment.
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Posted in Share Market | 
Tags: average returns, instance, Investment, investors, money, stock market