COMMON AND MUST TO KNOW RULES FOR INVESTORS

• Grab stocks when good companies post bad subdued or less than expected quarterly numbers. This could be a good opportunity to buy at discounted price.
• Always keep a list of good companies ready with the price at which you want to buy their stocks and keep checking their prices. This practice gives excellent exercise to individual investors.
• Always remember that acquisition price will determine your retrun first of all and other variable more so later.
• Keep your investment broking and demat account different from trading account.
• Write this on stone that a Bear market is the BEST time to go on hunting for investors.
• Never work on rumours. That’s traders’ recipe.
• Never over diversify if you want to make maximum or optimum of stock investing. Mutual funds take similar risks as you would. If you are selecting with ‘value-investing’ and basic principles of investing, then you do not need mutual fund. You can diversify on your own by diversifying amongst sectors, and other classifications.
• Use mutual funds for their sectoral schemes, gold etf, index schemes (we do not recommend index schemes of high return), commodity, real estate, and international exposure schemes.
• Do not judge soundness of investment by day to day fluctuations.
• Do not turn your trading positions into investment positions.
• Above all most importantly learn and adapt the concepts of Behavioral finance, or psychology of investing/money.
• Never ever, ever invest on borrowed money, not even in IPOs.
  
• Do not frequently change your investment decisions. Do your homework. Take time to decide on things but do not variate unless absolutely necessary.
• Keep liquid cash for contigent requirements.
• Believe in the ‘power of compounding’. The earlier you start and the regular you are, the wealthier you’ll become.
• Enweapon yourself with mental preparedness to stay immune from two enemies namely ‘panic’ and ‘euphoria’.
• Determine your targets. Get out when you get desired return. Don’t become greedy for more and more. Find new investment.
• Find a good broker, and not the cheapest broker. To save that 0.10% in brokerage, you may lose out a lot with a wrong broker.
• Before executing order, ask about the rate with your broker and put order only after confirming price.
• Never try to time the market. Never ever. Yes investors should be bear-market species. But in the beginning or midst of a bull market as well there are always attractive investment stocks. Always.
• Never sell on a bad day in panic.
• Listen to big boys. Forget the analysts. Listen what the PM is saying, what the Central bank governor is saying. Listen to top independent economic institutions and high profile senior industrialists and economic guys. Same applies for international watch.
• If you are not a seasoned investor or do not want to become one, then SIP investment is also a very good option. Here the investor does not get investment at high prices. It is averaged out and over the long term, the returns are not dissatisfactory.
• If you have big portfolio and old one too. Then shuffle it for changes into economy and businesses once in a year or three. Port, education and power stocks recently, for example.
• Investing is not about income. It is about wealth creation.
• Don’t buy good companies, buy good stocks.
• Bad company stocks at good valuation are many times better than good company stocks at bad valuations.
• Never fear correction. This is inseparable part of market. Train yourself and prepare for all situations peculiar to markets.