The share market crash can be converted into cash! The best way to make money is not always the easiest one. There is no substitute for hard and intelligent work on your portfolio by periodical assessment of the position of each share. Deal with them on merits and without assumptions. There are some principled approaches to reap the harvest in the market and you need to know how the market functions and responds to your investment moves. Some of the following issues can be addressed with a methodical approach and something tangible will come out of it.
1. Look out for undervalued companies. This falls under the domain of your research.
2. Is the price-earnings ratio of a company markedly lower than those of their peer group? You have a question to answer here. Find out why!
3. Bad news is not always that bad. The market often overreacts to minor oscillations and the price of a share plummets sharply. Trace the real issue, and try to take advantage of the unwarranted fall in the price.
4. Study the managerial team. What are their antecedents, and the past success/failure records.
5. Come to the fundamentals. A good balance sheet, low debt loads, active cash flow and consistent good earnings and payment of regular dividend indicate the health of the company. Stick to such a company.
6. Decide your goals and plan accordingly. Tag each share in the portfolio with a stop loss limit. Prepare a waitlist of the shares that you consider suitable for being included in the portfolio and drop the consistent share that is on a loss and replace it with the new one.
7. Read the quarterly reports of the company where you have the stake, and make it a regular habit. Understand where the companies stand in comparison to the present trends and opportunities provided by the market.
8. When in doubt about a particular share, get necessary clarifications from your broker. Do not buy a share just because others are buying and do not sell one, because others are selling it.
9. The best way to make money in the share market is through the sure way, and not with a haphazard approach. It is a personal matter related to the capability of your judgment. Your profits need to arrive through the safe trade channels and not the outcome of gambling instincts. When luck favors you, you may make some profits, but the risk that you are taking will lead you to losses.
10. Get rich quickly methods, often advertised in the websites and other stock literature are a means of entertainment only. The hot tips promotion is also another sales gimmick.
11. There is no substitute to the age-old tried and tested methods of investing in the share market. Some investors succeed exceedingly well because they are able to sense the timings of investments.
12. You can zero in on the best ways to make money, only when you have decided on your investment goals. That is to say, when you want the money! Upon these calculations, you are expected to plan your investments. Normally there are 3 types of investments in the market-long, medium and short term investments. The elements of risks in these three types of investments are different.
Avail the services of an experienced broker or a financial consultant. There are always best ways to make money, but an investor confuses this issue with the instant ways to make money. These are totally different issues and the approaches of such investors are different. Their mind-set is different. The results have got to be different. One with the methodical approach will succeed in the long run, and one with the confused approach will be in the market, like the actor who does the guest appearance in a movie!