5 Effective Ways To Avoid Losing Money In Stock Market


There is a study that states that about 90% of the investors and nearly 99% of the traders lose money in stock market. It feels really terrible to see people lose their hard earned money this way. The sole reason for the loss is because of the mindset of the people. They treat stock market like a get rich quick scheme and not hold the right set of patience.

I wrote this blog with the points on how you can avoid losing money in stock market so that others may not repeat the same mistake that I have made in the past. I hope these points will help you analyze your loss makers.

Also Read: Why Do 99% Of The Traders Lose Money In Stock Market

Investing at Right Valuations

If you have read my post on Chapter 8 of the Intelligent Investor Explained for Beginners, you will see how the author has emphasized on buying at the right price. This is also a path for value investing.

If you have picked the stock at the right price, you need not worry of the price fluctuations as long as the company fundamentals are unchanged. If you have more surplus capital, you may also buy more quantity for a cheaper price to average your stock value.

Then the most important step is to be patient. Someday or the other, the market will reward you, and when it does, it will reward you more than expected.

Studying the Fundamentals

The stock has that value because of the company and not the other way round. Hence, behind the underlying value of the stock lies the value of that company.

Investors need to analyze the company and how it can grow in the future and then move towards buying those stock. Imagine that you are buying that company and not just the stock.

Have a Personal Financial Advisor

Having a personal financial advisor is by far the most underrated thing in India. We tend to neglect this to save some money on the advisory fees.

But trust me, a good financial advisor can make your more money than what fees he is charging. Also, you get all the market news and updates from him if you don’t have the time to screen the market.

A financial advisor is an expert in his field, who will understand the market behavior better than a common man, which can avoid you losses.

Start Small First

This is the biggest mistake people do. They want to go all in. People are always living in a fear of missing out. But trust me, market gives everyone more opportunities than what they see.

Start with a small amount first, and after you have got a hang of the system you can slowly increase your capital. Initially everyone tends to lose money and that is not wrong. That’s the part of your experience.

Avoid Penny Stocks

I’m guilty of this because I have lost most of my money in the initial days by investing in penny stocks and somehow imagining that this will be my multibagger stock. But it is a myth. If you have low capital, invest it in mutual funds or ETFs (Exchange Traded Funds)

Bonus Tip: Keep Practicing

Trading / investing is a skill like driving a car. If you want to get better at it you will need to keep learning and practicing. In that way you will one day surely catch the pulse of the market.

This has helped me and it will surely help you. One does not become a good investor by birth, but acquires all those learning with one’s own experiences.

Now you can save money on your brokerage by switching to a discount broker. I highly recommend you to check out Upstox as it is my most recommended discount broker.


I hope you liked this blog post. If you have any more points on this topic then drop them in the comments. Also, don’t forget to join the newsletter to receive updates on my next blog.



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