It is quite obvious that an investment is made to earn profit out of it without doing anything. Every investor wants to maximize his/her profit or gains or minimizes loss. However, like there is nothing in the world that is certain, similarly, it is not necessary that every investment strategy will be successful. Every kind of investment involves a risk that includes the possible loss or profit of principal. Here we are helping you out with 10 commandments to follow strictly to become a successful investor; make you richer:
1) Planning and Sticking to Futuristic Strategic Investment
Every investor should invest in any security like Mutual Fund SIP to earn profit but when the market falls he decided to discontinue from it during the market crash which shows not to stick in their decision. But during the market crash, you will get the number of units and averaging works out in your favour. All we mean is not to change your strategies midway. As investor know what is best for them and also deciding foresight with an ideal investment strategy. Once the strategy is set, do not fluctuate in your decision each time decides to invest. This would only mean losses instead of profits.
2) Self-Research, the Best Research
An investor should always make an independent decision. His/her decision shouldn’t be influenced by the neighbour, friend, relative or tips from the media or his/her stockbroker and invest in stocks. The investor should always know with their investing securities if this could be done through research from various sources. Mostly the trading in Indian stock market takes place on its two stock exchanges i.e. Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). In BSE more than 5,000 listed firms and the NSE had about 1,600. This will also help the investor made self-decision.
3) Understanding Short Term Fluctuations
The stock market fluctuation is the general financial health of the companies that make up the Indian stock market which rising earnings per share rise and expanding PE ratio which increase stock price and also it cause the stock market as a whole to fluctuate upward.
An investor needs to understand that it should be a fruitful effect by the short-term fluctuation of the stock market. Investing in goods and reputed portfolio ensures good quality of your investment and capital appreciation in the long run. On the other hand, the short term volatility of the share market has got nothing to do with long term performance of investments and achieving financial goals.
4) Resisting the Penny Stocks
Every investor should invest in good stock but some investor has the misunderstanding that it is better to invest in penny stock (i.e. a common stock valued at less than one dollar and therefore highly speculative) than in high-value stock. For example: if you want to buy the stock at Rs 5 you need to check the background of the company before looking at the price of the share.
5) Tax-Friendly Investments, a Must to Do!
One of the most important commandments successful investors make is the investment decision based on tax considerations which may prove counterproductive on the other hand the long term capital gain tax is nil. So, if you invest for a time horizon of more than one year you will have a better post-tax return.
The Battle of Knowing Vs Doing
Are you confused and battling between what you know and what you do?. Here we are with few points to help you out. The knowledge piece appears quite fancy; interesting, learning something new, coming up with that cool idea and whatnot. The doing part sounds comparatively like routine work, no matter how easy this work may be to do or how obvious it should be done. Don’t fall into that ‘knowing vs. doing gap’. Now you know the commandments to successful investing and put it into practice to become richer.
Happy investing!!
