Ten Commandments of Investing
Here is well written 10 commandments of investing to new as well as experience investors. This would help to avoid costly investment mistakes when dealing with stock market. Carefully read and practice these to become a successful investor. Happy reading!
I. Thou shalt approach stock market professionally
Stock market is not for primary school students. It is a multistory building even though billions of trades happening everyday. It is the heart and controlling business across the nation and if you want to approach stock market professionally, then try to be an investment professional first by getting enough knowledge on how to invest in stocks..
II. Thou shalt understand stock market is a graveyard for greedy
You will never find any millionaire or billionaire raised from stock market within a or two weeks. Stock market have a history of losing money from those are approaching stock market with greed or to beat the market. Never try to trading in stock market instead of investing in stocks.
III. Thou shalt invest self first
Always invest on self to acquire enough knowledge on investment. Learn commonsense oriented investment lessons. Read best books like “Common Stocks and Uncommon Profits” by Philip Fisher. Never give eyes or ears to analysts, brokers, uncle Tom, stock tips etc. Do necessary homework, do analysis to find the best companies to invest.
IV. Thou shalt learn about the mistakes in investing
Stock investing wisdom not come from the stock investing strategies. In my opinion, every beginner as well as experience investors should start learning the common mistakes first than how to invest successfully.
Knowledge about common mistakes help investors to avoid costly errors when taking important investment decisions. Here is 35 common investment mistakes to know more about and avoid to commit while investing in stocks and stock market! So, learn about investment mistakes first and ensure any of these mistakes are not happening to you and at any cost.
V. Thou shalt never run behind fireflies
Penny stocks and micro caps are the most dangerous pieces in stock market. Because of the price is less, people with little knowledge love to have that to become rich fast. Chasing penny stock is like running behind a firefly to catch by thinking it is a piece of gold!
VI. Thou shalt read books that are the best friends of investors
Invest your time on best books first. Get the best one to know and practice the successful strategies of legend investors. Read at least 5 to 10 bestsellers about investing. It is recommended to read the books directly from the legend investors such as Benjamin Graham, Warren Buffett, Philip Fisher, Peter Lynch, John Templeton etc..
VII. Though shalt never invest huge or with borrowed money
Understand that stock market have up and down. It is volatile always. Never commit a mistake of investing huge money to single stock. In the same way, never predict the stock market and never invest with borrowed money. Both are costly mistakes and must be avoided.
VIII: Thou shalt never put all eggs to single basket
Diversification among large, mid, small cap stocks and diversification across sectors are the important point when creating stock portfolio. Never put all your money on stocks from single sector or stocks from large, mid or small cap only. Diversify beautifully. This will reduce the risk.
XI: Thou shalt monitor stock investment portfolio yearly
Monitoring investment portfolio is a mandatory activity for investors to understand whether any bad candidate in portfolio or to understand enough diversification and investment proportion available. For long term investors, it is mandatory to avoid mistakes such as de-listing of shares and avoid/churn assets from non performing or sinking sectors.
X. Thou shalt not ruled by fear or lose
Investment loss generally happens due to fear. Those are buying stock at high price become panic when the prices are coming down and would trigger panic driven selling. This error happening because of not having enough knowledge about investing and not buying during the bearish time but buying in high price during bullish time.
Follow the above 10 investing commandments to become a successful stock market investor.