Principles of buying and selling stocks:
The fifth principle: buy shares with your surplus capital:
Sometimes it has been observed that some people, after hearing the news about the consecutive growth of the stock market indexes and the increase in stock prices, in an emotional behavior, or the necessary capital of their life such as houses, cars, etc. They sell or buy shares by borrowing from others. Such behavior is not recommended in any way, because the stock market is always subject to ups and downs and entering the necessary capital of life in the stock market can make the investor feel shaky and anxious during these fluctuations, as much as possible Bear the loss, be forced to leave the stock market. But people who invest their surplus capital and savings in the stock market naturally have more endurance and calmness against the ups and downs of the stock market and act more rationally in their decisions.
Therefore, allocate only that part of your capital to buy stocks that, in case of a decrease in stock prices, will not disturb your life or endanger your and your family’s peace of mind.
The sixth principle: Accept volatility as the essence of the stock market:
A person who intends to invest by buying shares in the stock market, must accept the fact that price fluctuation is an inherent feature of the share, in other words, the upward trend of the share price in the past does not necessarily mean the continuation of this trend in the future. The downward trend of the share price in the past does not necessarily mean that the share price will continue to fall in the future. If you remember, in explaining the factors affecting the share price, we mentioned some environmental and industry-related factors that are beyond the control of the company. The occurrence of any of these factors may cause a rise and fall in the stock price, so it is necessary for the investor to accept this reality and the risk arising from it before entering the stock market.
The seventh principle: consult with experts:
Due to the fact that there are many and diverse factors affecting the stock price, therefore, analyzing these factors and making decisions based on them, requires expertise and careful study. Therefore, if you intend to buy and sell stocks directly, but you do not have enough expertise in this matter, be sure to consult with experts and qualified people. Investment consulting companies are established with the permission of the Securities and Exchange Organization. After examining the individual characteristics and the level of risk tolerance of the investors, these companies guide them in choosing the right stocks and in exchange for providing these services, they receive an amount as a consulting fee. To view the information of licensed investment companies, you can refer to the website of the Securities and Exchange Organization at www.seo.ir.
Once again, we review the seven golden principles for buying and selling shares:
1- Make a decision based on valid information, not rumors
2- Invest in the stock market with a long-term view
3-Always take care of your stocks
4- Form a basket of diverse stocks
5- Buy shares with your surplus capital
6- Accept volatility as the essence of the stock market
7- Consult with experts.
Mehdi Koh Soltani (financial services, accounting, financial and tax consultant):
Group of accountants, auditors, Tabriz
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