There are many myths about stock market and one of the common myth is- stock market is not a good place to invest. However, the truth is- stock market investment is similar to other legitimate investment options. Stock market investment also needs time to grow and give positive returns as all other investments.

It is the only investment which generates high returns over inflation. The stock market is full of risks, of course, but other investments too carry risk.

No investment is actually risk-free. FD has low risk but at the same time it offers very low returns. If someone keeps all his money in FD, he is at risk of concentration of investment. Besides, the interest on FD is taxable.

If you invest in mutual funds, which are equity market-related products, carries risk. If you go for a bond, there is interest rate, liquidity, inflation rate and credit risk. Hence, no investment is actually risk-free, investors need to invest in different investment categories to diversify and to reduce risk.

Stock market is risky, but that does not mean that equity investment should be avoided. If one understands or wants to understand the concept of market risk correctly, he/she should start investing. Avoiding equity, is not a solution, what is important is to understand this risk factor and ways to manage it.

Risk increases in the stock market investment when investor:-

• Invest without understanding the market cycle.
• Invest for the short term to make a profit.
• Invest in any stock to generate a quick income.
• Invest without any specific purpose.
• Blindly follow stock tips without doing any research.
• Invests in any particular sector or stock without diversifying.

Before you start investing in the stock market, you need to consider following important factors:

• Your risk capacity
• Age
• Your investment goals
• Your investment duration
• Your amount of savings
• Taxation
• Stock market perception/knowledge etc.

It’s better to learn how to invest in the stock market instead of avoiding it, isn’t it? Investors should understand some important things before starting to invest in the stock market:

1. The risk of the stock market is inherent.  The risk of the stock market cannot be separated. But one can always reduce this risk by understanding the market, its cycle, long term investment etc.
2. Start investing small amounts in blue-chip or large cap stocks. Invests money which you can afford to lose.
3. You can gradually increase the amount of investment once you get comfortable with the market cycle.
4. Do not invest in a large amount for earning profit in the short run.
5. Keep learning about the stock market. When you try to understand and learn more, you will find it safe to invest in the market.
6. If you are new, do not choose Intraday. Chances of losing money is more which will lead to a bad impression of the stock market.
7. The stock market is not a place to earn short-term profits like the lottery. If you want to make  money in a short time, better don’t invest.
8. Do not try to fix market times. There is no perfect time to start investing in the market.  Start early and invest for a long time.
9. Ups-and downs are the cycle of the market. Do not try to take advantage of this cycle to earn money. It requires skill and knowledge which no one has in reality. That’s why Warren Buffet recommends investing for a long term.
10. Do not invest as per the recommendations given by stock market brokers. Do your own research about companies before investing.
11. Avoid listening to the stock market shows on TV through popular channels and investing on the basis of their recommendations. All these recommendations are on a general basis. one needs to filter this general information and need to check if it is appropriate and suitable for him.
12. Stop following what others are doing. Consider your own risk and goal to find out how and where to invest.
13. Following the fundamental analysis of the stock company is a good way to choose.
14. Diversify your investment in the stock market. Invest in various types of company shares like in IT, pharma, banks, health, goods and services companies, mobile companies etc.  so that you can take advantage of all the market sectors and reduce risk.