14 Oct 2012

Ten Rules for Investing in Shares.

     Many investors wish to become successful in stock market , but lose even the capital amount.It is painful to lose your hard earned money.We know that  Warren buffet has created two lac crores from stock market investments.He is continuing as the third richest person in the world.
    The story is almost  same in the case of Mumbai investor - Rakesh junjunwala.They made profit from value investing strategies. Let us check the hidden rules of investing. 

 1. Buy fundamentally strong shares.It is a simple task.but,you should analyse the balance sheet and upcoming projects before investing.
 2. Understand the financial ratios of a company.It will help you to know the intrinsic value and earning potential of a share.
3. Do not invest against the market trend.You cannot make profit if share prices are falling and market is facing corrections.Don’t put your money in sideways market.
3. Avoid greed and keep emotional balance even in adverse market conditions.Don’t be panic.
4. Invest in a share not only for price appreciation but also for dividend and bonus.Wealth creation is often done by multiplier effect of bonus shares.
5. Buy at stock dips and hold it till it reach peaks.Act against the public opinion.because,common people only buy when market starts rising and reach the peak.
6. Never expect fast and quick money..Allow your shares to grow over a period of time.
7. Use moving averages and other technical tools for understanding the trend.
8. Know the price swings for making returns from short term deliveries.
9. Don't  mix  trading with your investments.Avoid futures and options trading ,if you have no time for keen participation.
10. Don't average penny stocks.but,do it in large cap stocks.     

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