1. Investment is very easy if you approach stock markets with an open mind. Don’t clutter your mind with numbers like support, resistance and volumes etc. Those are meant for traders. We are investors then why should we waste time in thinking about them.
2. Invest in good companies with sound business prospects at reasonable valuations and give management sufficient time. Treat every short term fall as an investment opportunity. Sincerely believe in fundamentals.
3. Read every good article on businesses and companies. Listen to every expert. Analyse them in your own way then invest in good stocks. Don’t follow any one blindly. I daily spend 6-8 hours in reading and 1-2 hours in listening about stocks and companies. I am passionate about stocks and companies. So I enjoy every moment of reading.
4. Never follow herds and broker tips. Buy good companies when no one is talking about them and sell the scrip when all are buying it. Quarterly results and balance sheets will help you in picking good companies. I bought metal stocks, Bartronics and Tanla Solutions in the last week in spite of steep fall as I believe in their fundamentals and growth prospects.
5. Allocate 25% of money to buy emerging stocks and contra stocks. Those who bought sugar stocks? (Select companies) in 2007 got more than 100% returns in just 10 months. Emerging stocks will take 3-5 years but sometimes give more than 500% returns.
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