If you want to invest in stocks, then remember these four main things.
1. Choose the right company - Choose a better and better company that has earned at least a 20% profit on the capital of its shareholders.
Ideally, a long-term investment (over 5 years) allows you to participate in the growth of the company.
In the short term (3 to 6 months), the performance of the stock is less driven by the company's core principle and more driven by the market price. Whereas in the long run, the relevance of the right price decreases.
2. Be Unscheduled - Investing in shares is a long learning process, in which you learn from your mistakes. These are some facts that can simplify this process.
Diversification in investment - Do not put more than 10% of your fund in a single share, even if it is a gem, on the other hand, do not invest in too many shares because they are difficult to monitor. 15-20 different stocks are good for a less active long-term investor.
Use this asset allocation tool to find out whether you need to invest extra from stocks.
. Analyze your company's performance with its quarterly results, annual reports, and news articles.
. Find a good broker and understand the settlement system.
Don't pay attention to hot tips because if it really worked, we would all be millionaires.
. Avoid the temptation to buy more because every purchase is a new investment decision. Buy as many shares of a company as per your total allocation plan.
3. Monitoring and reviewing - Regular monitoring and review of your investment. Keep an eye on the announcement of the quarterly results of the stock taken and keep writing the correction of share prices on your portfolio worksheet at least once a week. This work is more important for unstable times when you can get better opportunities to choose a price.
For example, find out how you can buy 1 rupee coins for 50 paise coins buy 1 rupee coins at 50 paise
Also, check that the reasons you bought the shares earlier are still valid or that there has been a significant change in your earlier estimates and expectations. Also, adopt an annual review process so that you can check the performance of equity shares within your total asset allocation.
You can review RiskAnalyser if necessary as your risk profile and risk capacity may change over a period of 12 months.
4. Learn from mistakes - During the review, identify your mistakes and learn from them, because no one can beat your own experience. This experience will become your 'pearl of wisdom' which will surely help you to become a successful stock investor.
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