It is a proven fact that those who indulge in day trading, either lose lots of money or they go bankrupt.
For any company to prove itself, it takes at least two years. If you are a farmer who wants to grow mangoes, you sow mango seeds on your farm. Next day, your friend tells you oranges will do better. You replace the mango seeds with orange seeds.
The day after, another friend suggests apples are the best bet. So you sow apple seeds.
In the process, all your money is spent on seeds, fertilisers and other raw materials with no fruit at all. To enjoy fruits, you will have to wait for at least two years.
To cut a long story short, day trading has not done anything better for anyone.
Rule number 2: Invest in knowledge
All you need to get into stock market is basic common sense. Buy stocks of a company only if you see their products on streets.
If you are planning to invest in a Maruti car, check whether there are Maruti cars running on the streets. If people like the product, it means the company will do good and will give good returns.
Since Chaudhary was working in a steel company, he could have any steel company because he has the knowledge of the same. Cement and steel is definitely required for so many constructions coming up.
Use simple logic and invest in companies you have heard of. People try hard finding companies. Invest in simple companies whose operations you can easily understand.
Rule number 3: Ignore rumours!
If you are confident about the company you have invested in, leave it. Ignore rumours.
Rule number 4: You do not need crores
It's a myth that you need lots of money to start investing. If Chaudhary had stayed invested with Rs 10,000 in Infosys in the beginning, today it would have been worth nearly a crore."
Similarly, today, even if you are investing a small amount in a company you are confident of, it is sure to grow a lot more after ten years.
Rule number 5: Get professional help
Often, in the haste to get rich fast, we lose patience and make some wrong decisions. Remember, there is always a doctor for your finances, whose advice is medicine for your money.
The choice is yours!
source: Moneycontrol.com
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