Sunday, 30 September 2007

How to invest in Stock Markets?

Tips and advice for stock market investors:

1. You will never succeed in Share Markets if your investment decisions are based on tips from Brokers and friends. You should study the markets, analyze the trends, take calculated risks and then invest in stocks.

2. Learn lessons from failures. Even great investors like Warren Buffett suffered losses in his early days.

3. Identify your risk profile basing on your age, economical status, risk bearing capacity and future needs.

4. Never put all your money in single investment portfolio. Diversify them.

5. There are no shortcuts to earn money in share markets. You should work hard to make money in stocks as in other fields.

6. Never follow herd mentality. Buy valuable stocks when panic investors are selling them. Sell over valued shares when all are buying them. Never afraid to buy a fundamentally strong but undervalued stock. This is the key to the success of Warren Buffett. This is called Value investing.

7. Large caps are secure while midcaps give high returns. Identify the future sector and find the best stock in that sector. Accumulate those stocks. Power and Shipping are the future growth sectors in India.

8. Never invest in Z category stocks or rupee stocks just for the sake of high returns.

9. Never invest without stop loss and target. Never change them without any specific reason.

10. Read at least 2 business news papers and investment magazines.

Take care, happy investing!