How to succeed in the Nepalese share market?
March 2, 2020 | Investopaper“Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.”- Paul Samuelson
One may argue that the stock market is the easiest place to make money but the reality is different. Being successful in a share market is a daunting task. This is because maintaining the growth of your portfolio return for the longer period is very difficult to achieve.
The challenge is you need to generate several traits to make rational investment decisions at different market situations. So, in this article, we will discuss the 6 traits of a successful investor that you need to develop to excel in the Nepalese share market.
a) Focus and passion
This is one of the basic traits of a rational investor. This applies not only to the share investors but all the investors around different fields of investment. The first and foremost thing to excel in your investment is to be focused and passionate about your work. Investing is not an easy task if you want to make a career or a living out of it. This is because you have to cope with different changing situations and make decisions accordingly. When you use different strategies while making share investment, you need to be clear about what you ought to gain from that particular strategy. Similarly, being passionate about what you are doing gives you extra motivation to work harder.
b) Control over one’s emotion
Emotion is something that can break you down in the stock market. This is what separates a rational investor from the beginners in the stock market. Rational investors can take control of their emotions and make wise decisions unaffected by it. On the other hand, new investors decision will be influenced by their emotional boundaries. Your thought process becomes dim when emotion mixes with it. So, mastering your emotion and coping with the market sentiments is the major challenge of a novice investor. The experience will help you to set aside your emotions and become a rational investor.
c) Stay updated with market
Rational investors are prone to market news and information. They look for valid sources that they can use to retrieve this information. Data and information are very useful and important to make investment decisions. In the case of Nepalese share market, you can use the Nepse website to find important data and information on the trading companies. Other web portals also provide information on the stock market. You can interpret the information of a company you receive and then make buying or selling decisions. Investors are very sensitive to news of company regarding revenue growth, dividend, new products, and services, etc.
d) Continuous learning
The stock market is one such place that keeps on changing day by day. While you may observe the significant index rise today, it is not totally predictable that the market will continue the same rhythm the following day. This unpredictability of the stock market is what makes it more exciting. So, continuous learning helps rational investors to tackle difficult market situations without panicking. You need to develop a different strategy to maximize your portfolio return in changing situations. What is valuable today may not carry the same value in your portfolio tomorrow. So, continuous learning is very important in a dynamic environment.
e) Calculated Risk-Taking
Rational investors are calculated risk-takers that help them to be successful in the share market. Share market is one such place where there is high price volatility. Investments are always subjected to a certain level of risk. Therefore, it is very important to assess the level of risk associated with your portfolio stocks. If the associated risk justifies the possible return from investing in that stock, then you can go forward with your decision. The risk-return approach can be helpful to make good investment decisions. It is not sensible to invest blindly to get instant profit without considering the risk factor.
f) Optimistic and Realist
A rational investor is always optimistic about the growth of his investment. Although he may face the market setback, he has the capacity to back himself up in those situations. He is sure that the good companies and their stock will perform better in the near future and the return they provide will be satisfactory. They look at the big picture and invest with long term approach. Every market runs either it is bull or bear have opportunities to explore. Besides, rational investors are also realist which helps them to set limitations. They look for consistent return and expect steady growth. They do not look for huge success over a shorter period.
The ultimate way to succeed in the stock market is to invest sensibly in the stock market. So, this article will help you to think like a rational investor.
