As I come to the end of this series, my last food for thought – If one can survive with the risk of driving a car, one can very well survive the stock markets.
• Investing in the stock market / stock is very much like buying a car
o Identify your budget
o Do your research before you buy the stock
o Compare it with its peers
o Read reviews of the stock
o Look at historic performance of the stock
o Set your return targets of the stock and time period
• Investing in the stock market / stock is very much like driving your car
o Know your limits of the return on investment from your stock
o Don’t be ‘hands-off’ your portfolio
o One will not get good portfolio managers (just like you’ll not get good drivers)
o Be wary of what others are doing in the market not necessarily follow the herd
o Be cautious of the big vehicles (FIIs) who are also invested in your stock
o Maintain the course and speed; overspeeding (taking too many risks) is sign of desperation
o Bigger the car, higher is the confidence while driving (not applicable to auto drivers)
• Investing in the stock market / stock is very much like maintaining your car
o Review your stock’s performance regularly
o Check your portfolio with a financial advisor (not necessarily me :-)!)
o Sell your stock (just the way you would sell your car) when it reaches its end of fair value
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