“Rule No.1: Never lose money. Rule No.2: Never forget rule No.1." - Warren E. Buffett

Saturday, December 06, 2008

Basics before investing in shares

Before Investing in shares it is very important that you have a plan about your investment.

How much you are going to invest, how long you can wait with your investment, (this is very important,) because in share market time is money.

Have a discipline in Investing.

Never invest huge amount at once in stocks, invest in balanced time intervals, always buy some shares when the market is falling, when it falls again buy again.

Never try to invest all your money in one sector, or one company, have your investment spread over in different sectors and different company shares and balanced.

Whatever may be the reason, never attempt to barrow and invest in shares, whether it is equities or funds whatever it may be, this is not the place where you can invest your barrowed money.

Chart out a plan for your investment, and never overule it at any cost.
Stick to the plan have a discipline and never loose your temper.

Never become a slave to your setiments, if you want to be a successful trader and see your investment grow rather than vanish avoid strictly this three:
1.Sentiments 2.Urgency 3.Panic
Possess this three:
1.Plan 2.Discipline 3.Patience

Everyone is wishing to buy stocks when the market is at its lowest and wants to sell the same when the market is its highest, but remember its only everyone's wish and no one can predict or determine when its going to fall or which is the lowest point at its fall, and viz a verse.

So its always advisable that you pick a few shares and invest on it in graduall intervals.

Investing is not a joke, its a long term activity and involves a lot of factors, and even those factors also cannot predict the market.

Its true that we can multiply our investment fast, but you should not forget if you are not sticking to the above discipline you can also see your investment vanish more faster.