Dos & Donts of Investments

 

The following is a list of Dos and Donts that you should go through.

 

It is aimed at helping you gain an insight into what ones mental framework should be in the process of investments. The following have been observed time and again and are also based on empirical evidence.

 

 

  Dont try to beat the market. You simply cant moving sensibly with the market is good enough.

 

  Explore the idea: Sell when the market is rising, Buy when the market is falling. This is an important way to make the best of price movements.

 

  Dont be greedy. When you are making a profit, book it and become ready to buy at lower levels.

 

  Be ready to engage the market. If you are not ready, that opportunity will pass.

 

  Dont fear. Markets will dip and they will rise.

 

  Be Patient. The market may make movements that are sudden, against your analysis or beyond your expectations in all circumstances remain patient.

 

  Buy good things and dont expect bad things to outperform good things. When you buy a good security, the probability of it giving you a positive return is higher than a bad security.

 

  Avoid deciding in a state of panic. Decisions taken while in a state of panic usually have bad results.

 

  Dont over trade. Avoid trading unnecessarily.

 

  This is a game of averages. Success in investments is a function of averages.