10 Steps to Becoming a Stock Market Millionaire

Trading essentially in the stock market geared towards? Earning wealth of course! Now investments made in the stock market may be a good opportunity to enhance your earnings or pull some extra dough into your pockets at a time when costs are soaring skywards for most Indian households. While there is no shortcut towards becoming an instant millionaire with stock market investments, you can practice financial discipline and a prudent investment strategy en route towards accumulating wealth for future years with stock investments. 

It is not easy becoming a stock market millionaire and it does not only involve keeping an eye on the live share market and tracking indices, performance, benchmarks and adopting buying/selling strategies accordingly. It is also about staying invested during lean periods, scaling up risk tolerance steadily, absorbing losses and wisely deploying gains. It is a lot about avoiding emotion while taking financial decisions and rationalizing the entire journey towards becoming wealthy in the future. Here are some steps that you must follow in order to eventually draw the earnings you desire from the stock market. 

Steps that you should consider

  • Emphasize on hot propositions in the market- Once you start with your stock investment journey, make sure that you greatly emphasize upon stocks which are already hot in the market. Do your homework, look for stocks which are already touching newer highs in terms of performance and snap up these fast-growing entities. Plan to stick around with these stocks until they touch even greater heights. Do not look for stocks coming down to newer lows. 
  • Buying and Short Selling- Some investors think that wealth is only created in a bullish market. However, they could not be farther from the truth! Short selling should never be ignored. You do not have to hold onto stocks for a longer duration in order to earn a tidy profit. You only have to analyze the success of several day traders; they capitalize on short selling and buying. 
  • Quickly accept losses- If you wish to be a successful stock market investor, you should not have any ego throughout the journey. Take this out of the equation and in case you have any loss, you should swiftly move on towards reducing them with alacrity. Do not remain fixated on the failures that you just experienced; move on and look for future strategies. Failure is a part and parcel of stock market investments. Move on to a new investment and shrug it off. 
  • Draw into profits seamlessly- Your earnings will never translate into profits until and unless you actually draw or receive them. Hence, do not be hesitant to get the profits early on in the game or take at least partial profits. Markets change swiftly and it is absolutely fine to get out of the race temporarily whenever you feel that this is the right thing to do. Take the profits whenever you can. 
  • Adopt new technology- The financial markets and the world are both evolving swiftly and you should be adapting too if you wish to attain more success in stock investments. This is not a time to be reluctant towards adoption of technology. Additionally, check out technology based companies in the market. They represent the future and you should embrace new business models and technologies which are poised to hit it big in the future. Stay ahead of the curve with your investments. 
  • Liquid stocks should be persisted with- If you wish to earn income seriously in the market, then make sure that you persist with stocks which are highly traded and liquid. Try and avoid stocks with low liquidity levels since these are stocks making huge promises but they do not uptrend. 
  • Do not blindly believe anything you hear- In the world of trading and financial markets, there is a lot of information and talk going around. Do not listen to any hype in the market or any promises made by experts. Only look to the stock in question and how it is doing. Do your homework on performance and the actions being taken by the management. This is how you will base your future expectations. 
  • Over diversification and leverage should be carefully considered- Do not be over diversified and use leverage. This is not the way to become a stock market millionaire. Usually aim for 1-2 stocks at one time and do not use 30% of your assets in investments as well. 
  • You do not have always have to sell at the highest price and buy at the lowest- Several new traders keep focusing on the fact that they need to purchase stocks at their bottom-line values and sell them off when prices are at their highest. This will naturally indicate higher profits although you should focus on the key merits of these moves instead of blindly sticking to the bottom and top-line values. You can always come in the middle and still book good profits. Flexibility is the key here. 
  • You should always have a well-defined plan- If you really wish to attain success for the long haul in the stock market, you should always have a very concrete plan for each and every trade that you make. Prior to starting your investment journey, you should have a particular reward/risk profile created for what you actually want from your investments and stick to the same even in lean periods. Never veer away from your investment plan. 

Becoming a stock market millionaire may seem impossible and in many scenarios, it can be really daunting indeed. However, it is still possible in the long run with disciplined investment strategies and proper plans. You should be dedicated towards creating future wealth in line with your goals while doing your research, homework and analysis periodically in order to stay on top of market trends. You should prepare yourself for temporary failures, market fluctuations and periodic losses. Only this will ensure that you have the temperament to stay invested for the long haul and seriously book profits. 

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