In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or will be sold at a higher price for a profit.You can have a look at below ten golden rules for investment which will hold you in good stead for the life time.
- Avoid the herd mentality : The world's greatest investor Warren Buffett was surely not wrong when he said, "Be fearful when others are greedy, and be greedy when others are fearful!"
- Take informed decision and here we come into play by providing you with the investment calls as per your risk profile and time horizon.
- Have realistic expectations as this is the key to remain in market for a long duration.
- Invest in business you understand and this is the reason Warren Buffett never invested in tech stocks. Check Warren Buffett method of selecting stocks here.
- Invest only your surplus funds which you do not require in near future and do have some cash reserve which will make sure that you do not take trade decisions on an impulse.
- Create a broad portfolio and this amplifies the fact that donot put all your eggs in one basket.
- Don't try to time the market as none has been able to catch the top or the bottom so far in his life time.
- Do not let emotions cloud your judgement as each trade in stock market is a fight between your emotions. Identify a stock and stick to it like Warren Buffett is sticking with Cocacola for life time.
- Follow a disciplined investment approach and here comes into play the systematic route of investment.
- Lastly monitor your portfolio but it does not mean that you start looking at your investments on daily basis as it will only make you a blood pressure patient and instead review it say on a quarterly basis. However if you intend seeing stocks every day than probably intraday is best for you and you can consider using hot share tip for the day to trade professionally to use available time optimally.
