Invest in fundamentally strong companies
- Invest only in fundamentally strong companies, which will handle market fluctuation and perform well in the long run.
- Also invest in strong stocks that are also liquid stocks.
- Do not go for momentum or penny stocks.
Diversify your portfolio
- Diversify your portfolio to hedge against risk.
- Prioritize your financial commitments and allot funds according to that.
- Always plan for long term investments, which will fetch you better returns.
- Follow lifecycle investing.
Learn to sell
- Most investors buy and hold on.
- Set the profit target and sell.
- However, don’t be impatient on short-term market fluctuation.
Cheap shares are necessarily not worth buying
- There is famous saying that do not chase price, chase value.
- The price may be low because the face value has been split.
Greed will make you easy prey
- Do not invest emotionally, stay focused on your goal.
- Make decision on logical basis not emotionally.
- Be careful, many scamster are waiting.
- Don’t get carried away by advertisements.
- Also beware of the get-rich schemes being sold through SMS and emails.
Don’t get overwhelmed by sectoral frenzies
- The present sectoral frenzy is around FMCG.
- Remember, all companies in a sector are not good. Each sector will have some very good companies, some reasonably good companies and many bad companies.
- Be also wary about companies that change their names to reflect the current sectoral fancy.
Don’t blindly take decisions
Begin investing early, so you can retire early.