Many beginners in Nepal enter the stock market with hope but little direction. They face confusion over tools like MeroShare, rely on hype instead of research, and often lose money due to impatience or lack of a plan.
With over 6.224 million demat account holders (21% of Nepal’s population as of mid-March 2024, Economic Survey 2080/081), the number of investors is growing rapidly. But this growth also means more people are at risk of making the same costly mistakes.
This guide walks you through the top 8 mistakes to avoid in share investment in Nepal, based on real beginner errors, and how to fix them.
1. Not Understanding MeroShare & IPO Process
Many first-time investors in Nepal rely on MeroShare to apply for IPOs but don’t fully understand how it works.
Common issues:
- Linking the wrong bank account
- Forgetting to confirm ASBA
- Not submitting EDIS for selling
Tip: Before using MeroShare, learn about BOID, bank account verification, ASBA approval, and EDIS submission. A small mistake can mean missing out on shares or losing money.
2. Investing Based on Hype or Tips
New investors often buy shares based on social media recommendations or tips from friends.
Why it’s risky:
- You don’t know the company’s fundamentals
- The tip could be part of a pump-and-dump
Tip: Always do your research. Check the company’s past performance, earnings, and public announcements. Never invest blindly.
3. Expecting Quick Profits
Many expect to double their money in a few months, especially after seeing IPO gains.
Reality:
- Stocks can go down as well as up
- Long-term patience often pays off more than short-term trading
Tip: Invest for the long term. Set clear financial goals, and avoid panic selling if prices drop.
4. Jumping In Without Clarity on Your Role
Many beginners don’t think about whether they want to become a trader or a long-term investor. This confusion leads to inconsistent decisions and losses.
Why it matters:
- Traders need to monitor daily charts and news
- Investors need to think long term and avoid short-term noise
Tip: Figure out your approach before starting. Are you willing to track the market daily and take risks like a trader, or are you looking to grow your money slowly and steadily like an investor? Your strategy depends on your time, risk tolerance, and goals.
5. Ignoring Company Fundamentals
Some first-time investors buy shares without checking even the basic financial details of a company.
Big mistake:
- You might end up investing in an overvalued or underperforming company
Tip: Learn key basics like PE ratio, paid-up capital, and dividend history before investing. These simple metrics help you understand the company’s financial health and long-term potential.
6. Not Having a Budget or Risk Plan
Investing without knowing how much you can afford to risk is dangerous.
Why it’s a mistake:
- You might invest money you can’t afford to lose
- You may panic during market dips
Tip: Set a clear budget. Only invest what you can afford to let sit for years. Avoid borrowing money to invest.
7. Putting All Money into One Company
Diversification is key in any market—including NEPSE.
Mistake to avoid in share investment in Nepal:
- Putting all funds into one company or sector like banking or hydro
Tip: Spread your investment across multiple sectors. A mix of blue-chip stocks, growth companies, and even some IPOs can help manage your risk.
8. Lack of Patience and Discipline
Many first-time investors make emotional decisions—buying when prices rise, and selling when they fall.
What goes wrong:
- Acting out of fear or greed
- Chasing trends or reacting to temporary market news
Tip: Have a strategy and stick to it. The NEPSE market can be volatile. Don’t panic. Discipline and consistency beat emotion-driven trading every time.
What to Do Instead: A Quick Checklist
| Mistake | What to Do Instead |
| Not understanding MeroShare | Learn ASBA, BOID, EDIS basics |
| Buying on hype | Research company fundamentals |
| Quick profit mindset | Set long-term goals |
| No clear role | Decide if you’re a trader or investor |
| Skipping fundamentals | Check PE ratio, paid-up capital, dividend history |
| No risk plan | Only invest what you can afford to lose |
| No diversification | Spread money across sectors and stocks |
| Impatient behavior | Follow a plan and stay consistent |
FAQs
1. How do I start investing in Nepal’s stock market?
Open a DEMAT and MeroShare account, link your bank, and start with IPOs.
2. What is EDIS in MeroShare?
It’s the system to deliver your shares to the buyer after selling. Without it, your sale might fail.
3. Are IPOs always profitable?
Not always. Some IPOs get oversubscribed and may give only small allotments or even losses later.
4. Should I sell stocks immediately after IPO listing?
Only if you’ve hit your target. Some stocks grow more over time.
5. How can I learn more about investing?
Follow SEBON announcements, attend online sessions, and read from trusted Nepali finance websites.