The market has enjoyed a spectacular bull run in the last few months. Although the potential wealth-generation potential of equities has been well-known, not many people can use this asset class to increase their wealth. In June, it reached a new record high.Many investors panicked when the market plummeted in March 2020 and pulled out. The market recovered faster than expected and was rewarded for those who braved the storm.Let's find out how to make money with this asset class, and what your goals are.Timing the market is a big NO!Timing the market is less important than time in the market. Because even the most experienced investor cannot predict when markets will go up or down, this is why timing the market is more important than timing it. It is simple to make money with equities by buying low and selling high.But, it is impossible to predict when this will occur. Market performance is affected by many factors, most of which are outside the control of investors. It is better to invest more time in the market than try to timing it.Timing the market can lead to poor decisions and wrong calls, which could result in your wealth being eroded.Select Fundamentally Strong StocksYou should only invest in stocks that have strong fundamentals, regardless of whether you're a novice investor or an experienced one. A company must have a strong balance sheet, corporate governance, and be a leader in its field.For steady growth, you can invest in the 100 largest companies by market capitalisation. These stocks can stabilize your portfolio and protect you from losing the gains when the markets turn bad.Always verify the stock's long-term performance and check how it performed during bearish periods.Be realistic about your expectationsAlthough equities offer higher returns than fixed income instruments, it is important to be realistic about your expectations. Even if you are invested long-term, you can't expect them to deliver high returns in the double digits (30-35%).Markets do not move in a straight line. Markets go through cycles that see a peak following a crest. A stock that promises high returns should be regarded as untrue. It is important to keep your expectations realistic. This will prevent you from getting too excited.Keep your commitment for the long haulYour patience is tested when investing in equity. To maximize your gains, you must remain committed to your investment over the long-term.You shouldn't let short-term fluctuations stop you from exiting a fundamentally sound investment.Even the strongest stocks can be tossed around during market turmoil. It is also a great opportunity to purchase quality stocks at attractive valuations. A fundamentally sound stock is always a winning investment over the long-term.Summarising it allYou can maximize the potential of equities by using the right approach and goal-based investing. To reap long-term dividends, avoid biases and look at the bigger picture.(The author is EVP and Head, Edelweiss Personal wealth)Moneycontrol.com experts do not represent the views or investment advice of the site. Moneycontrol.com recommends that users consult certified experts before making any investment decisions.
