Top-10 tips for not losing money in the share market

Historically, investing in the stock market has brought fruitful returns to investors over time. However, share market can also go down and present investors with possibilities for both profits and loss; for risks and return.

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The first rule of making money in the share market is not to lose it.
Photo by: WA Today

The good thing about investing in shares is that you can take full advantage when the economy is growing. Your corporate earnings grow as the economy grows. That’s because economic growth creates jobs, which creates income, which creates sales. Over time, the stock market tends to rise in value, though the prices of individual stocks rise and fall daily. By investing in stable companies, you can grow your money over time. Likewise, investing in many different stocks will help build your wealth by leveraging growth in different sectors of the economy, resulting in a profit even if some of your individual stocks lose value.

Secondly, the stock market makes it easy to buy shares of companies. You can purchase them through a broker, a financial planner, or online. Once you’ve set up an account, you can buy stocks in minutes. Several online brokers even let you buy and sell stocks today for free.

Another benefit of investing in shares is delayed taxation. Delayed taxation means that there is delay taxation on your gains. If you buy a stock and it goes up in value, you don’t need to file a return on the earnings. You only need to report your stock gains when you sell the shares for a profit. On the other end, if you lost money on another stock purchase, you can use the loss to reduce taxes on your other stock gains.

Buying company shares is easy, and same is true to selling them. The stock market allows you to sell your stock at any time. You can turn your shares into cash quickly and with low transaction costs. This is a great advantage since prices are volatile, and you can run the risk of taking a loss.

Want to learn some tips on winning the stock market? Read this article: https://www.watoday.com.au/money/investing/top-10-tips-for-not-losing-money-in-the-share-market-20190225-p5104e.html