Investing in volatile stock markets

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Indian stock markets are most volatile currently and volatile stock markets are known for pushing away investors from investing. So does that mean that there cant be any profits made when stock markets are most volatile and fluctuates for 2-3 percent daily. Well, a person can invest in volatile stock markets also but his approach should be different from the method which he uses when the stock markets are more stable and promising.

There are certain points which one should keep in mind while investing in stock markets when they are most volatile. The golden rule to minimise any loss and increasing probability of making profits in volatile market conditions is to diversify your investment. One should never invest whole money into similar type of stocks but should diversify to minimise the losses and may be to make profits. Diversifying your investment is a must for making profits during volatile stock market conditions.



Second rule is to invest in long established companies that offer stable results rather then smaller companies who are more prone to sudden stock price fall due to various reasons. try investing in large-caps or companies which are listed on biggest indian stock exchanges like Bombay Stock Exchange and National Stock exchange, always refrain from investing in smaller companies when the conditions are volatile.

One can pick public sector stocks for investing during volatile periods or other seasonal stocks for investing like tourism etc. So the main points to be taken care while investing in volatile stock markets are following:
1. Diversify your investment in various domain stocks.
2. Invest in Govt backed companies for more risk protection.
3. Invest in bigger companies and refrain from investing in smaller companies which have a smaller customer base.
4. Try to choose seasonal stocks during volatility
5. Invest your money in gold during recession times

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