1 of 14

Write now Article Tools

According to Mark Twain, October is the one month in which you should not invest in the stock market. Other months are November, December, January, February, March, April, May, June, July, August and September.'

If you find the above a very witty analysis, well, so do I. Mark Twain may have been a great writer and an eminent wit. But, as a stock market analyst, I'd say he is well out of his depth.

First, we have to concede two points immediately. The stock market crash happened in October1929. Under the present dispensation, the stock market is not as lucrative as it used to be. Having said this, we have to state clearly that investing in stocks is still a very viable venture to go into.

If you are really keen on making money in the stock market, these are the steps that you have to take into consideration.

1) Buy Penny Stocks:

As the name implies, penny stocks are stocks that have a relatively low price. The good thing about penny stocks is that the prices may appreciate in future. Since you paid a relatively low price to acquire these stocks, you stand to make a huge profit after some years or even months.

2) Diversify:

It doesn't pay to put all your money into just one particular stock or two. The smart thing to do is to diversify your stock investments. This serves to protect you from loss in case a certain industry is facing a reversal of fortune.

3) Be Informed:

You cannot buy stocks without having a lot a lot of relevant information. Carry out your due diligence before you stake your money. Buy stocks only in companies that have a potential for growth and you will profit from your investment.

4) Buy At The Right Time:

The best time to buy stocks is at the end of the financial year. The annual results are out and most people are selling their stocks because they've received a dividend already. Naturally, the volume of stocks being sold will cause the prices to fall. Now, is the time to buy stocks and make profit in some months to come. The trick here is to buy low and sell high.

5) Think Long Term:

Sometimes, buying stocks does not favor the short term investor. Understand this and aim to buy for the long term. It is possible to double or triple your money if you buy stocks at the right time. However, this will not happen overnight. The trick is to identify stocks that have great prospectus, buy the stocks and wait. In a few years, appreciation in stock price, dividends and bonus shares will earn you a lot of cash.

So, as you can clearly see, Mark Twain was not quite bang on target when he made the statement quoted at the beginning of this article. It is still possible to make money in the stock market but you have to be smart and you have to give it time as well.

Learn more about this author, Emmanuel Osondu.
Click here to send this author comments or questions.

Add your voice

Know something about How to make money in the stock market?
We want to hear your view. Write now!