Last Updated on November 19, 2022 by Hammad Hassan
Nowadays, investing in stock market is one of the most trending thing about which most of the peoples like to get aware about, as it is one of the best source to make money without putting any initial efforts or without investing a huge amount of time. so in this article you can get to know about how you can make money from stock market and some of the aspects related to it.
how to make money from stock market?
how much money one can earn from stock market?
top 5 tips for beginners to make money from stocks.
the bottom line.
How to make money from stock market?
making money from stocks is quite hassle free thing as it does not require any high personal attention and time consumption. so there are various ways through which an investor or a trader makes money money from stock market some of them are.
- equity mutual funds.
- hybrid mutual funds.
- exchange traded funds.
trading or intraday trading is one of the best tool to make money from stock market in short term. here intraday trading refers to buying and selling of shares on the same day. so how do a trader makes money from stock market?
these traders used to buy the stocks at lower prices and sell them at higher prices that they assumes it would be on the same day. from the price at which they buy the stock to the selling price of the stock, the gap amount between buying and selling price of the stock is considered as there profit.
however apart from these some of the intraday traders also like to do short selling in which they buy stocks at higher price and sell them at lower price and here also the difference amount would considered as there profit.
investing in stocks is somewhat similar to trading but it had rich in features that provide you higher profit than trading in long term. so how investors make money from stock market through investing?
there are few ways through which an investor or you can make profit from stock market. for example dividend income, bonus shares, split shares, etc. here dividend income is one of the best passive income source for which most of the peoples likes to invest in stocks for long term, other than that bonus shares are those shares which you can get at free of cost when a company declares that and it will directly increase your capital investment.
Equity mutual funds.
equity mutual fund is a fund which includes a list of stocks of companies which is selected by the fund manager of that particular mutual fund. so how equity mutual funds help to earn profit from stock market?
the investor of equity mutual fund can directly gets the profit from his initial investment. when an investor invest in a mutual fund he get allocation of units of that particular mutual funds and when the price of that allocated unit grows, it means that the actual invested amount is also growing gradually and it is the only source which helps to make money from stock market through equity funds.
Hybrid mutual funds.
hybrid mutual fund is also a kind of similar to equity mutual fund, but as compared to equity mutual fund it is quite less risky and as the risk factors are lower so the expected returns are also lower than equity mutual funds.
here the partial amount of total invested amount is get invested in stock market and the rest of the amount are get invested in the debt funds like corporate fd’s, government bonds and so on. here one can expect returns upto 10% to 13% on year over year basis which is comparatively higher than bank saving’s account, bank fixed deposits, etc.
the returns you receive from your capital investment would be the only source of income however as it also provide some good returns so it is also a best way to make money from stock market.
Exchange traded fund.
exchange traded fund or etf’s is a set of stocks prepared by the stock analyst of the broking firms on the basis of their growth rates, sector based, low volatility, etc. so how one can make money from etf’s?
so making money from etf is also similar to making money from direct investing in stocks, however the major factor that stands it apart from that option is the risk diversification factor. while investing in etf’s an investor invest in so many companies at a same time with a particular set of amount which helps in diversification of funds and reduce the risk to bear losses.
here the investors again gets the profit from dividends, direct capital gains, etc.
How much money one can make from stock market?
it is never precised that how much money one can make from stock market. because it is not be predicted that how much money an investor can make from stocks. however there are so many investors in stock market who made their complete wealth from investing in stocks so it is quite possible to get rich out of stock market. here you can expect returns upto 15% to 20% which is 3 to 4 times higher than any bank saving accounts or other investment options.
Top 5 tips for beginners to make money from stocks.
· Proper analysis :-
while investing in a company’s stocks, analyzing the stocks is the best thing that even a successful investor recommends. so there are few factors that a beginner investor keeps in mind while investing are the average growth rate of the company, the working of company, the debt factors, etc.
· Avoiding speculations :-
speculation is a sign of bad investor, so a beginner investor must stay out of doing speculation in the start of his investing journey. most of the stock investors losse their money due to speculation is stock market so investing in stocks through value and ethical tips than it mus helps the investor to actually make money from stocks market.
· Successful investor tips :-
according to one of the most successful investor “warren buffet” – “if you buy a company stock on the basis of company’s fundamentals then the perfect time to sell those stocks is almost never.” so following these tips of investors helps you to stay motivated towards investing and also helps to follow ethical investing tips as well.
· Invest for long term :-
most of the newbie investors gets into stock market with a view to make money as soon as possible which leads actually in loosing of money. so investing for long term to grow your funds organically through mode of compounding would be a good option for a beginner investor. however it may takes some time but it is one of the most reliable and lowest risky way to make money out of stock market.
· Invest in high growth stocks :-
investing in high growth stocks helps to get higher returns as they also provides high amount of dividends on the stocks you hold. for example, nowadays information technology sectors are booming around the world as we are getting into the digital world there are huge chances of growth in this sector. rather than that due to uncertain conditions
The bottom line.
so, making money from stock market is quite simple if one can simple ethics or value investing tips. because investing for long helps your invested funds to grow properly, along which you can keeps on getting rewards on the basis of you holding positions.