Tips for Safeguarding Your Investments on Stock Trading Apps

Stock market trading has become accessible to a wider audience with the coming of online trading applications. Facilities like zero brokerage trading accounts, a user-friendly interface, along with multiple analytical tools facilitate better investment plans. However, even after choosing investment schemes smartly, it is crucial to safeguard those investments for better returns and risk management. 

Moving investment as soon as it starts to head south is not the ideal way, but smart strategies to safeguard investment are required. Let’s decode tips and methodologies that will help you maintain a promising portfolio.

Investments on Stock Trading App: Strategies You Must Consider 

As Warren Buffett emphasized, one key rule of investment is never to lose money. The rule doesn’t speak strictly about not losing money but rather a piece of underlying advice for developing strategies to safeguard your investment. Here are some strategies to safeguard your investments in stock trading apps:

• Diversification is Key

A simple rule of maintaining a profitable portfolio is that a diversified portfolio is meant to outperform a concentrated one. Diversification is a strategy that talks about putting money in multiple assets rather than one.

• Know Your Tax Implications

Remember that your investment in the trading app is liable for tax implications and benefits. Staying updated with capital gain taxes on short-term and long-term investments can help in profit optimization. 

Did You Know? The tax on capital gains in long-term investment is 12.5% across all assets and 15% on capital gains from short-term investments.

• Set Stop-Loss Orders

Knowing when to stop going ahead with an investment is crucial to safeguard your investments. A stop-loss order is a reliable strategy that instructs a stock to be bought or sold when its price reaches a specified level. This helps stop loss and even lock a profitable position in the market. Investors can now use tools available through trading platforms to execute stop-loss orders.

• Revisit Your Investments Regularly

Putting your money in an asset in the stock market by carefully evaluating the market condition is one part of the investment. Revisiting your investments regularly is important. If you witness any fraudulent or irregular activity make sure to report instantly.

• Keep Your Emotions in Check

A common challenge that many traders face is emotional trading. The stock market is volatile and presents multiple luring opportunities that might not be a smart choice in the long run. Make sure to stick with your investment plan and don’t oversell or overbuy as this can impact your financial planning and the added transaction cost creates a financial burden.

Pro Tip: A low brokerage trading account in India like Bajaj Broking can help you reduce the overhead costs of trading. Additionally, through the freedom pack ₹20 is charged for each order and ₹10 for each order under the professional pack.

• Stay Aware of Frauds and Scams

Online trading has opened the doors to the stock market for many. However, at the same time, the chances of getting tricked into fraud and scam investments have also increased. Ensuring due diligence before investing through trading apps is the way to go forward. A reliable trading platform like Bajaj Broking provides a responsive grievance redressal service to report a fraud of any kind. 

• Keep an Emergency Fund

Investments in the stock market are a reliable method to generate income, but keeping a separate emergency fund ensures that you do not have to withdraw/liquidate investments to meet any emergency needs.

• Choose a Reliable Trading App

There are numerous trading platforms offering flashy features. Choosing a reliable trading app with a good market reputation not only promises analytical tools and quick transactions but also provides security for your investment portfolio. For instance: bajaj demat account is a registered corporate trading portal and a clearing member of Bombay Stock Exchange ltd that operates in compliance with safety rules and regulations.

Summing Up

Stock market investment can present impressive returns if done smartly. Once you have invested, you must revisit those investments to ensure a continued position of profit. Safeguarding investment in a trading app is not rocket science rather, just a few strategic movements throughout.