How to be Successful Investor – Part II
In my previous blog we have discussed about some
principle of smart investing. Today we will share some other rules about smart
investing.
1)Diversification of portfolio: It would be good if you diversify your
portfolio between equity and debt according to your age, financial goal and
time horizon. No one can predict about future of the market, specific sector.
It would be wise move if you have invested in a well diversified manner.
2) Proper homework and research: Do proper research and homework before any
investment. If you do not have time then take help from the experts. Remember,
you are buying company business or assets. You are not buying the just number.
If you expect a company to grow and prosper, you are buying future earning of
the company.
3) Stay calm and don’t panic: Don’t panic if you have not sold your stock
portfolio before market crash. Don’t rush to sell the next day after huge
market crash. If you can’t find more attractive stocks, hold on to what you
have.
4)Review portfolio in some interval: Review your investments
time to time as no market is permanent either bull or bear. Keep get update
yourself about those sectors and companies which have invested. Latest
information and knowledge is the key to be successful investor.
5) Avoid short gain or any market tip: There is no free lunch.
Never invest on sentiment or on any tip. Avoid market rumor and IPO. Most of
the IPOs decline after market listing . The recent example is Facebook IPO and
many more. This does not mean you should never buy an IPO.
Outperforming the market is a difficult task. It
would be better if you make a financial plan and accordingly fulfill the future
goal. It is very difficult to implement all these discussed rules here.
Everything is in a constant state of change including economic and political
environment. So be careful adopting any rule of investing as the time changing
investing rules also change. It would be better contact a good financial
planner and expert before any investment decision.
If you have any query about investment or financial
planning feel free to ask through mail.
Regards,
Arvind Trivedi
Certified Financial
Planner
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