In today’s digital age, fake news is a big problem and believe it or not random stock market tips are one of the most widespread forms of fake information floating around.
Many investors, especially the new ones consider random stock market tips as the ideal way to invest. As a result of investing on the basis of random stock market tips they often end up in losses and quit the stock market completely. They blame the stock market for their losses and never invest in stock markets again.
When a child starts his education, he first starts with nursery, then primary, secondary, junior college, graduation and then post-graduation. No matter what, a child cannot simply study for graduation or post-graduation before completing his primary education. This is a step by step approach which helps the child in building a strong foundation before proceeding with higher studies.
Similarly rather than investing on the basis of random stock market tips, an investor should focus on the basics of stock market investing and proven methods of wealth creation.
We all have a friend or a relative who is a self-declared stock market expert and very often that we tend to get influenced by their advice. Social media too is flooded with chat groups promising you the extra edge in the form of stock market tips for huge gains.
However stock tips are almost always incomplete and incorrect. In some cases such tips are sent with a malicious intent of artificially manipulating stock prices. As a stock market investor at some point of the other you may have received messages such as:
“Buy XYZ company for Rs.xxx today. Huge upmove expected in next few weeks as the company has bagged orders worth Rs.xxx crores”
“Technical Pick of the Month: Buy DEF LTD AT CMP. Short Term TGT XXX in 30 Days”
Such stock market tips are usually sent in bulk by operators who work as a cartel. They first buy huge quantities of low priced stocks and trade among themselves to artificially raise the prices. At the same time they spread rumors in the market about how the stock is poised to move up due to some other company buying stake or turnaround of the company. Many new investors who are fooled by stock market tips fall prey to this fraud and then the operators dump the stocks in large quantities leading to a free fall.
Ignore Random Stock Market Tips And Go For Portfolio Based Long Term Approach
If you really want to make money from stock markets, stop investing on the basis of random stock market tips. Instead you should opt for a portfolio based approach for long term investment as it reduces the risks associated with equity investments and allows the investor to benefit from the upside potential. Stock markets are generally stable in the long term and by remaining invested for long term in good quality stocks you are basically giving the businesses to realize its true potential which ultimately reflects in the high share prices. It is a proven fact that a well-diversified portfolio with a long term investment horizon is the best way to create wealth from stock markets.