The stock market is decked with pockets of uncertainty, but there are numerous tried and tested principles that can turn out to be extremely beneficial for long-term financial success. Most investors capitalize on their appreciated stock to earn a handsome and almost immediate profit. They also keep their weak stocks under an aspiration that they will rebound, but keeping underperforming stocks with this hope comes with its own set of risks.

Here are some tips to ensure maximum returns on your investments:

• Tenbaggers : Tenbaggers are investments that can increase tenfold. The trick is to hold a small number of stocks to reduce loss and risk levels. There needs to be a huge ability to exercise willpower and hang on to stocks even when they have increased in value multiple times as there are chances of the stock rising even higher. A stock must be considered with its own merits, and any advice given about it must be given its due consideration and should not be heeded blindly.
• Letting go of a loser : There is no guarantee that a stock will bounce back after a massive decline in value. It is necessary to be extremely rational and acknowledge clear signs of failure. Sometimes, waiting hopelessly for stock to rebound can lead to unwarranted losses.
• Chasing tips : Regardless of how reliable the source is, tips to ensure maximum returns on your investments must be taken with a pinch of salt. Also, personal research on a tip will increase the guarantee of it turning out well.
• Initial struggle : It is always advisable to look at the long-term implications and trajectory of a stock. An investor just starting out can succumb to getting rid of stocks due to short-term fluctuations. Momentary volatility of a stock is always natural, and hanging on to the stock for a sufficient period is a tip to gain maximum returns on investments. Certain traders use changes in stock that happen over minutes to create some profit, but substantial return on investments manifest when stocks are held over long periods.
• The importance of price-earnings ratio : The price-earnings ratio is an important metric of judgment when it comes to predicting the movement of stock. However, making it the sole determining factor would be a stretch, so keep an eye out for the other factors as well.
• Investing in smaller enterprises : Many small companies have the potential to become the blue-chip owners of tomorrow. The boom of a smaller enterprise can contribute significantly to maximize the returns on investments. This doesn’t mean that you should invest only in small stock, but always keep an eye out for small enterprises that have the potential to revolutionize the market.
• The misconstrued nature of penny stocks : Believing that there is less to lose with a low-priced stock is false. The risk of stocks crashing is the same, irrespective of their value. The lack of regulation for a penny stock, in fact, makes it riskier to invest in it.