The first thing that comes to mind is share market / stock market is risky and one should stay away from the stock market. Which is not true; if you look at the long term returns from Equities / stocks and take NSE Fifty (NIFTY) as benchmark you would realize that NIFTY has given the best inflation adjusted return over longer periods of time. However what really spoils the party is two emotions which though aren’t associated with investing but are definitely associated with Humans and those are Greed and Fear. While investing in stock market you should very clearly be staying away from these two emotions and take wise decisions and be much disciplined.
Stock market investment is a much disciplined process and one should clearly follow the following rules
- Never invest in something which you don’t understand
- Stay away from the stock tips
- If you don’t have access to research then don’t invest in stocks rather take the route of mutual funds
- Control your emotions like greed and fear
- Invest for a longer period of time and keep a watch on the company and business fundamentals you have invested in.