We live in very stressful times.
Whatever we earn, gets spent very quickly on our daily needs.
There are times when additional expenses crop up or when there is a medical emergency in our homes.
This is the time we realize our mistake - of not having made any kind of investment in our lives.
Even if people want to invest their cash, they are confused which is the best way to get an attractive but safe return on their hard-earned money.
Stocks can help you in increasing your bank balance in the long run.
Stocks will always give you a better return than most other investment schemes like bonds and even real estate.
Stocks also allow you to diversify into the various sectors of the market - this will help you to insulate yourself from any negative effect caused in a particular sector.
There are some disadvantages too - if you buy stocks of companies which are not doing well - then you will lose a large amount of money.
Stock prices of some badly performing companies might even turn to zero.
Also if you have invested money in stocks which is then needed by you for some other urgent need, you might not be able to get the same amount put on those stocks, as the stock price might be lower than the price at which you had purchased it.
Thus you have to wait for an attractive price to sell your stock - this might take a very long time.
Thus you will not be able to use the money put on the stocks for any other purpose whenever you need it.
In spite of these negatives, you should buy stocks - they can be a good investment provided you follow certain guidelines.
Yes stocks will always offer you an interesting option to make some much needed profits on your investments.
But in most cases, people get blinded by greed and forget the guidelines which need to be followed while investing in stocks.
Don't keep on trading too often in stocks - especially if you are new to the game.
When you trade too often, you hardly make any money - instead your broker earns a handsome amount of fees from you.
You also end up paying more on taxes compared to a longer period of time.
Don't panic easily whenever there are rumors which indicate a negative trend in the market.
Even if you have heard some bad news, don't take drastic decisions, you will end up selling your stock at a very low price.
Always decide a target - the price you want to sell a stock at - once you have met your target, don't get greedy and wait for the stock price to go higher so that you might earn a larger profit.
There's a high risk factor when you get greedy - the stock price might suddenly plunge and go to a very low level.
Always sell your stock when it has reached the target price at which you had planned to sell it.
This will help you to make regular profits.
Always do a bit of research on the company stocks you plan to buy.
Finally, regularly keep a track of all the news connected with your stocks and their price.
This will help you to buy or sell your stock at the right times.