Points to be remember while investing in stock market.
Don't invest without a clear plan of action: Begin by determining your investment goals based on your time frame and risk tolerance. This is the most basic investment advice that is given to new investors.
Avoid buying on tips: Never believe on stray talks. Don't invest in a stock just because your family or friends have advised. Make sure that you carry out a thorough research or consult a financial advisor before investing in a particular stock.
Don't be tempted to buy cheap stocks: The level of stock prices does not always give away details on the level of business the stock holds. Don't purchase stocks because the price have fallen or are cheap, as this is one of the most basic stock market mistakes a new investor does. Make sure you analyse the stock first before investing in it.
Compounding your losses by averaging down:
Never average a stock because it is falling down. Once you realise you have invested in a wrong stock, you must book your loss instead of buying more and waiting to see the stock go down further and increasing your loss further.
Never put all your eggs in one basket: Make sure that you don't put all your investments in a single stock or a sector. Diversification is the significant step for investing in Stock Market. Balance out your investment portfolio in stocks.
This is a most common mistake found in investors.