The Indian stock markets are not going anywhere at the moment. The Stock markets and the investors both seem unsure about the bottom of the share market. Nobody is talking of stocks or investments these days, which according to me is a very healthy sign that time for investing is almost here.
I have always maintained that when your milkman, green grocer and Rikshaw wallah start talking about shares, it is a sure sign for the coming crash in the stock markets and is time to sell your stocks get out .
Then comes a period when the share markets are headed in no direction. This, according to my limited wisdom, is the time start searching for stocks which might be the future winners.
It is in such uncertain times that the stock market bottom is made.
It is difficult, if not impossible, to say when the stock markets will halt their downward journey and change direction for the better. Who knows, we might have already hit the bottom and the stock markets may soon return to their gradual and halting upward trajectory.
Wealth making in the stock market has more to do with discipline and the power of time to compound growth than being smart at stock picking and timing the markets just right. Here are some suggestions which, if you follow them, will virtually ensure reasonable, steady wealth appreciation.
Golden tips for investing
Tip No 1:
Start planning for tomorrow, today. Spread out your investments throughout your earning years. Invest regularly and invest for the long term to buy in at an average price that includes both stock markets’ up and down trends.
Don’t wait until you have large amounts of money to invest. However small the amount you are able to save, start early. The earlier you start, the better are your chances of making great wealth. Time is a crucial factor, as wealth creation is a factor of both the power of compounding and the returns on your investments.
Tip No 2:
Start investing as soon as possible so that the power of compounding begins sooner; time is the magic that converts paisa into rupees. Stay away from derivatives and futures. Powered by greed and unrealistic expectations the investment in these securities can lead to financial ruin. Leave them to the experts.
Tip No 3:
Do not leverage, it is difficult, if not impossible, to predict short-term Stock market trends.
Buy markets, not stocks. We all know that the Indian economy is in a secular phase of prosperity and the stock market is the best proxy for the growth of an economy. To benefit from the soaring Indian economy, buy the market as a whole and not any single stock. Mutual funds could be your answer to buying the whole market.
Tip No 4:
If you want to buy individual stocks then pick stocks that mirror the broader indexes, but never buy a single, or a handful of stock exposures. This means that you need to spread your risk across various market segments in the event a particular stock does not perform for reasons beyond the company’s control. It is easier to predict company earnings, but difficult to predict stock prices of the same company in the short run. Ironically, over the long term, stock prices mirror growth in a c |
