SHARETIPSINFO >> Articles Directory >>How can you avoid risks in the stock market?

 

We all know one thing very well and that is nothing is certain in life. The entire system of life is based around uncertainty. We do not know what our future will be like. We do not even know or are not sure about enough about our present any more than we do about our future. However, all that we can in reality do is to predict or forecast our future. We can indulge ourselves in mysticism or occult or the likes and try to get a hang of what is in store for us in the future. But is that really a full-fledged truth? How far, precise and clear can we be about our future? The answer is of course a very big “no.” No matter what we can never be completely sure of what is in store for us in the future. This is so because the future is related with uncertainty. And uncertainty always leads to risk no matter how big or small the risk it is in reality. Risk is not just related with the future, it is also equally related with the present. But what in exact does the word “Risk” mean? Well, risk means, the chance or possibility of something bad or dangerous that could happen. Risk actually stems from uncertainty. We always have questions like how can we avoid taking a risk while starting a new business venture or how can you avoid risks in the stock market? Even questions like how we can avoid taking risk while availing loans, making an overdraft and so on are always on our minds.

Risk is involved in our daily life
When we talk about taking a risk we know there are big or huge chances of our venture or proposal going haywire or showing bad results or a result that we do not and might not want to expect, risk is also related to everything that we do. There is risk involved in every day of our lives. In every step we take there is risk involved in some way or the other. But, it is normal human nature to try to avoid risk, of any kind that we face or might face in the future.

Profits are the reward for taking risk
It has been said and proven in theory. We can never earn any kind of profits as if we do not take or accept the risk associated with it. We can never achieve anything in life if we do not take risk. We can manage to win or succeed in life only if we accept the challenges that life has to offer. And taking those challenges involve a huge amount of risk and uncertainty alike. As mentioned earlier profit is the reward or prize for taking a risk. In business, we cannot survive if we do not take risk. A business venture is all about risk taking. It involves uncertainty and the bigger the risk the better is the profits. Risk can also be insurable risk and non- insurable risk. Usually, it is said that a person as a business firm earns profits on the non-insurable risk that he takes. As we already know risk is present in every area, in science, arts and commerce alike, of course. Risk is present hugely in the stock market. Stock trading of shares, debentures, bonds, mutual funds and other securities in the share market can never go on without some person or the other willing to take risk and investing in the securities.

A stock market is a place where the transactions relating to buying and selling of shares and stocks, debentures and so on take place.

Whenever we have extra income we try to spend it on something or the other don’t we? Yes, we do. But, don’t you think it would be much better if, instead of wasting our cash, we decided to invest it on some useful securities. Investing in the stock market is a very good option. But before investing you should try to know how can you avoid risks in the stock market. The prices of shares keeps falling and rising suddenly in the stock market. We never know whether the shares where we have invested will give us profit or will we incur losses for them.

 

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