Equity Investing is something which is known by almost everyone but for different reasons. Though Till now equity invest stands on top in terms of Investment and returns but still people term it from different name like Gambling or what not.
Equity Investment doesn’t come with guaranteed returns like FD, CD, PPF or Govt . Bonds, Maybe thats why this is the most heated and hated concept among People concerned.
There are people who love it even if they don’t understand it maybe they must have watched Baazaar or Wolf Of Wall Street
So, as we saw there are two kinds of people out there one who love it and one who doesn’t and in my opnion they both right on their places.
Equity Investing has something which sure needed to be simplified for boththe sections. Getting extreme on Equity Investment is not right nor avoiding it altogether.
If you invest aggressively into equity without understanding the trend you are gonna lose for sure and then after some time you will shift to the second section who call it gambling or game of luck.
Here we have tried to collect some most important factors that one should always keep in mind while Investing into Equity:-
Don’t Invest in stock, Invest in the company
Most of the time, what most of the Beginner Investor use to do is to Invest looking at the Stocks trend, No. Thats the wrong way. Analyze the stock and research about the company as well, Its past performances, working capacity, Customer reach, network etc.
When you Invest in Equity, you need to be sure that company is there for long term, though its a tough job but still not Impossible. See, what future has kept for that sector. Like IT sector has a huge upside in future or Generic Medicines.
Don’t Invest in Someone Else’s Story
You hear stories of how one particular stock has made someone millionaire and you Start thinking how you too can Invest in that and be like him. No Just don’t do that. Stories are all over the stock market, your’s maybe different. Don’t try to walk in someone else’s shoes. Stock which worked for him may not work for you. Research yourself.
Yes you read it correctly.
Warren Buffet has said, “If you are enjoying your Investing process, than maybe you are making it all wrong. Investing is tough work”
Buy Decision: Not a child’s Play
There is word known as ‘Multibagger’. When Peter Lynch talked about it in his book he had experienced it in his career. But then this word came to D-street among the Beginner’s and medium experienced Investor they started terming it as frauds and manipulation.
Look, Buying decision is the toughest one, there is a whole galaxy of Stock in which you get to choose. And from them you try to choose a Multibagger stock and there you make the mistake. No, Not in choosing Multibagger but seeing a low price stock and thinking this would be a Multibagger. Thinking or your instinct doesn’t work here.
You make mistake choosing and then you start calling ‘Multibagger’ fraud/Luck/Manipulation.
You had the chance to choose from and how you chose, by seeing the low price. No research, No homework just the price. This way forget about Multibagger, if you can save your principle amount that’s the biggest luck. Deep analysis is very important here.
Institutional Vs. Retail Investor
As we were talking about choosing a stock and that too Multibagger. Well here Institutional Investor get advantage as they have the huge pool of talented Analyst, databases, qualified manpower who can track reports easily.
But its not like we are in disadvantage situations.
Warren Buffet has, “You feel to diversify your portfolio when you don’t understand what you are doing”.
Don’t try to go for everything. Analyse 5-6 companies thoroughly and Pick 2-3 to invest in.
Mr. Damani has said, “ It’s tough to find a strong stock, but when you find one. Well buy that full of truckloads. That’s enough to make your rich.”
‘Money is not made on single bets’ Do you know what that means.?
Well it just means you need to have a balanced Investment. Like If you want Multibagger you sometime go for small cap but only going for small cap is not a good bet. You need to fill your portfolio with some strong Mid cap and Large cap’s also.
Lastly I was Reading an article in ET and the writer has written like, “Everyone cant be the next Jeff bezos or Bill Gates, Single bets don’t work for everyone. they were lucky”. Well I just wanna say Luck stays outside this Stock market’s wall. Here only hustle works and everyone CAN become the next Jeff or Warren or Bill gates if they do what it needs.
And they are not there because of some luck, thats pure hardwork daily, 24*7*365.
Accept your mistakes and move on
No..No. This Equity Investment is not a mistake. Here we are talking about something else.
There is no fixed way to make money all the time, you will make mistakes as well. Warren Buffet, Mr. Damani, Big Bulll everyone makes, you are not new. It happens with all of us.
While choosing the stock sometime you just choose something based on incomplete reports or analysis which proves to be wrong. That time its necessary that you cut your losses and come out. Don’t regret Learn.
Here averaging works, Lets say you invested in 10 stocks after deep analysis but its not necessary that you make profit in al of them. You will amek profit in 6-7 and loss in 3-4 but thats ok. Overall you will be in profit. It happens with everyone.
Equity Investment is risky but looking at the returns the risk is worth taking. The wealthiest people in the world are equity Investors.
Why you wanna stay behind from them.?
Learn what you don’t understand ad join the Investors group. Don’t waste your energy on something which can’t make you stand among rich list. Equity Investment is trending not many people know about it do you know what it means, well it measn if you know this you can earn in many ways.
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