GOLDEN RULES FOR LONG TERM INVESTMENT
HERE ARE SOME OF THE RULES WHICH ONE SHOULD FOLLOW WHILE INVESTING IN ANY STOCK FOR A LONG TERM PERSPTCTIVE :-
1)WHAT TO BUY:-
It is very important to select a stock. To select a stock to be invested for a long term perspective one should have close look at the fundamental statistical data such as balance sheet, profit & loss Account, company’s management, future vision and strategies etc.
For a long term investment one should select a stock which is the at the Top position or in second position in particular sector whether it be pharmaceutical sector, IT sector, Auto sector, consumption sector etc
2)WHEN TO BUY:-
After making the stock selection the second important thing is when to buy that quality stock, A stock should be at a reasonable price at the time of investment otherwise one cannot good return on that stock.
Timing of buying a stock is done with the Technical analysis, by examining the technical chart of any stock one can analyze the time or price at which that stock should be invested
3)PATIENCE:-
Patience is very important for a long term investor. Some times it happens the when a user buy a stock it start its bull moment immediately and run upto 30%-35% within 2-3 months which is a very good return but it also happens that after a sharp uptrend it goes down in a consolidated pattern and stand at a position for a long time may be 6 month or 1 year or 2-3 years, but if a stock is bought with a good research on its fundamental studies there is nothing to worry about its price and growth and that’s the time where the investor should keep patience to hold the stock at a standing or down trend position too.
4)RESONABLE EXPECTATION-
An investor should have a reasonable expectation on their investment. For example if one invest Rs one lakh for a time period of 2-3 years with a good fundamental research and at a good position he should have an expectation of 25%-35% CAGR , which is treated as the best return on investment because in comparison to Fixed deposit in bank or Saving account interest which is approx 7%-9% or in mutual fund approx 18%-20% it is much more better to have a 25%-35% return. Hence an investor should have a reasonable expectation on their investment
5)MUST SPEND SPARE TIME IN OTHER WORK TO AVOID MENTAL PRESSURE AND DIPRESSION:-
It happens with many people that if you do not have any work to do then your mind will work randomly and you will put a loss in your investment hence, It is recommended that do not panic after making a investment on quality stock and to avoid the depression and mental stress regarding the time period of your investment one should have a part time work or job or any business which diverts your mind from the stress
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