This festive season avoid mistakes, make big profits: Anil Singhvi's 'Vijay Mantra' for stock market investors
On Vijay Dashami-the festival of victory, people across the country celebrate win of good over evil by burning effigies of demon king Ravana, who symbolises evil. The effigy of Ravana is a symbol of 10 evils and we in our life should learn to keep us away from these evils, so that life can be smooth and successful. Similarly, the same mantra should be adopted in the case of investment to earn maximum profit. Zee Business Managing Editor Anil Singhvi lists down 10 winning mantras for making big profits.
1. Prior to making any investment in stocks of any company, we must do a thorough study and research about the company and its background. One should never buy stock of that company which is not known. Do a market research before buying shares and not later. Image source: Zee Business
2. When we make a move for investment in the stock market, we come to know about many companies whose stocks are of cheaper value. We are tempted towards those stocks and decide to buy them in large numbers, but realise about our mistake when we lose our hard-earned money. In penny stocks, you may lose all the money you have invested because in lottery or bad shares, luck merely favours one or two in 1000 people. Image source: Zee Business
3. Never commit a mistake of investing all your money in a single stock. There should be variety in your portfolio. You should never invest all the money in one place. If you are afraid of making diversification in your portfolio, you should invest in an index or exchange-traded fund (ETF). Image source: Zee Business
4. There is an old adage that shares and children should be as much as you can handle. Buying too many shares will not earn you a lot of money, therefore, you should invest money in the stock market according to your limit or according to your risk capacity. Image source: Zee Business
5. You should keep in your mind the fact that you should eat as much as you can digest. The same applies to stock market, which operates at risk. Therefore, take as much risk as you can bear. Make a mistake, but that should not be so big that you are not worth making that mistake again. Image source: Zee Business
6. Never borrow money to make an investment in the market because the lender is more intelligent than the borrower. It would turn out to be a day dream to make 5 percent in a day by paying 2 percent interest of the month. So never commit such mistake in your life. Image source: Zee Business
7. If you catch a falling knife instead of averaging it will reduce the loss. Notably, averaging down is an investment strategy that involves buying more of a stock after its price declines, which lowers its average cost. Image source: Zee Business
8. It may sound strange, but you should prefer live-in relationship with shares, rather getting married. Because these are shares, not your children whom you will have to raise. So every year on Diwali, clean your portfolio of investment the way you clean your house. Image source: Zee Business
9. The graph of your heart beat and Sensex should not be flat. Develop the habit of making ups and downs your friend, not your enemy. Heavy fluctuations would put timid and impatient traders at a disadvantage, but a calm and intelligent investor would always benefit out of such a situation. Image source: Zee Business
10. As you know, plants, children and stocks all take time to grow. Avoid being impatient as you may harm yourself. If you are investing money in the market, you must give it some time to move forward. You need to be patient and remain focused as these traits in the market creates wealth. Image source: Zee Business