GOLDEN RULES

GOLDEN RULES IN STOCK MARKET

WHAT IS GOLDEN RULES? GOLD IS ONE OF THE PRECIOUS METALS AND IT VALUE INCREASES FROM TIME TO TIME .SAME WAY GOLDEN RULES ALSO VERY VERY PRECIOUS IT’S VALUE IS VERY MUCH WORTH THAN GOLD FOR INVESTOR.

WHO ARE YOU?
IN MARKET WHO ARE YOU MEANS FINANCIAL STATUS. WHICH MEANS YOUR TOLERANCE LEVEL.STOCK MARKET IS THE BEST & HIGHEST INVESTMENT TOOL BUT LIKE BOTH ENDED KNIFE IT ALSO HAVE ANOTHER FACE WHICH WORST LOSS MAKING TOOL.
SO BEFORE YOU KEEP YOUR STEP IN THE STOCK MARKET DECIDE YOUR TOLERANCE LEVEL (YOUR CAPACITY TO ACCEPT LOSS).
GOLDEN RULE 1 SIMILAR TO THIS TOPIC
GOLDEN RULES 1: IT COMMON TO ALL KIND OF INVESTOR WHETHER YOU INVEST 100 RS OR 100 CORERS,
GOLDEN RULE 1
ALWAYS INVEST 10% OF YOUR SAVINGS IN STOCK MARKET
IT’S VERY CLEAR THAT NEVER OVER INVEST. JUST BE A COMFORTABLE INVESTOR BY GOING WITH RULE NO-1.

EXTRAS:
I SAW PEOPLE WHO INVESTED IN STOCK MARKET BY BORROWING MONEY FROM OTHERS, PERSONAL LOANS, JEWEL LOANS AND AS PEAK
EVEN SOME PEOPLE SELLING THEIR PROPERTY FOR THIS. BUT 99% PEOPLE END UP RUINED. THIS UNACCEPTABLE BUT FACT ABOUT MARKET.
THESE PEOPLE WILL BE SHORT TERM MINDED WHICH ENDS UP IN DISASTER .


WHEN TO BUY?
NEVER BUY AT HIGH PRICE AND SELL AT LOW PRICE. THIS CAN BE ALSO CLEARLY MENTIONED AS DON’T BUY WHEN THE MARKET IS AT PEAK DON’T SELL WHEN THE MARKET IS AT LOW.

 JAN 2008 BUYERS ARE FOOL (SENSEX AT 21000)………&

 MARCH 2009 SELLERS ARE ALSO FOOL (JUST ABOVE 8000)…..


MAN WHO BOUGHT 20% ON JAN 2008 ------------(SENSEX 21000)
20% JULY 2008----- (AROUND 16 K)
20 % DECEMBER 2008------- (AROUND 9 K),
20% ON MARCH 2009--------- (AROUND 8 K)
20% ON JULY 2009------------ (AROUND 14K)
IS THE BEST, CLEAR, WISE INVESTOR WHO GETS NEARLY 200%+ RETURNS OVER HIS INVESTMENT!!!!!!!!!!!!!.

GOLDEN RULE 2:
DON’T INVEST BULK. INVEST IN PART & INVEST PERIODICALLY.

STRICTLY FOLLOW THIS RULE WILL SAVE YOUR LIFE (INVESTMENT)

EXTRAS
REASON BEHIND BULK BUYING IS GREED! THIS IS A MAJOR FACTOR THAT DRIVES MARKET UPWARDS …. BUT 99% GREED MAKES PEOPLE STUPID AT LAST BY TESTING THEIR PATIENCE (EXAMPLE: AN NEW COMER TO STOCK MARKET I HAD COME TO KNOW THAT HE HAS INVESTED 5LAKH ALL HIS INVESTMENT AMOUNT IN ONE STOCK AT THE SAME TIME THAT TO AT HIGHEST PRICE OF THAT STOCK. NOW YOU CAN JUDGE RESULT .YES HE IS NEARLY 60 % LOSS IN JUST 2 MONTH THINKING ABOUT SELLING THAT STOCK AND BUY OTHER STOCK SO THAT HE CAN EARN WHAT HE LOOSED IN PREVIOUS STOCK. THIS IS 100% FOOLISHNESS. UNLESS INVESTED COMPANY IS FUNDAMENTALLY WORTHLESS ONE SHOULD NEVER SELL AT THESE LEVELS FOR HUGE LOSS PATIENCE IS THE ONLY KEY TO MAKE THIS INVESTMENT SUCCESS HE HAS TO WAIT EVEN FOR YEARS TO SEE PROFIT IN THIS INVESTMENT)

TIPS:
ALWAYS KNOW THESE BEFORE BUYING A STOCK
 52 WEEK HIGH & LOW
 HISTORY HIGH & IPO PRICE
 CURRENT TREND(TECHNICAL ORIENTED LATER MORE
COLLECTING THESE DATAS BEFORE INVESTING WILL GIVE YOU SOME IDEAS ABOUT WHEN TO INVEST BALANCE AMOUNT




WHICH TO BUY ?
BEFORE INVESTING YOUR 1 ST 20% OR 1 PART OF INVESTMENT AMOUNT LOOK AT THE SENSEX .
SENSEX = SENSITIVE INDEX. YES VERY... VERY... SENSITIVE
INDEX IS GROUP OF COMPANIES FROM VARIOUS SECTORS
THE LIST OF DIFFERENT SECTORS ARE:
 BANKING & FINANCIAL SERVICES SECTOR
 AUTOMOBILES SECTOR
 INFORMATION TECHNOLOGY SECTOR
 OIL & GAS COMPANY SECTOR
 METALS& MINING SECTOR
 PHARMA SECTOR
 TELECOMMUNICATION SECTOR
 UTILITIES(POWER )SECTOR
 REAL ESTATE(SECTOR),CEMENT&CONSTRUCTION SECTOR
 MANUFRACTURING,MEDIA&ENTERTAINMENT
 SERVICES SECTOR
ETC………………

THIS SHOWS THAT SENSEX IS NOT MADE ONE COMPANY OR ONE SECTOR IT IS MIXTURE OF VARIOUS COMPANIES FROM VARIOUS SECTOR.
GOLDEN RULE 3 SIMILAR TO INDEX
GOLDEN RULE 3:
INVEST IN VARIOUS SECTOR (DIVERSIFY YOUR INVESTMENT)
THIS VERY CLEARLY MENTIONED BY SHARE MARKET KING “WARN BUFFET” DON’T PUT ALL YOUR EGGS IN ONE BASKET .

EXTRAS& TIPS:
NSEINDIA.COM& BSEINDIA.COM. BOTH WEBSITE CONTAINS DETAILS ABOUT THEIR LIST OF INDEX COMPANIES . YOU CAN TAKE PRINTOUT OF THEM AND DIVERSIFY YOUR INVESTMENT.
ONE OF MY FRIEND INVESTED ALL HIS 50 K IN TATA STEEL GIANT IN STEEL INDUSTRIES ALSO VERY GOOD STOCK . HE BOUGHT @ 400+ IN THE YEAR OF 2008-09 WHICH WORST YEAR FOR STEEL SECTOR ALL STEEL STOCKS TAKES A BAD HIT . AT LAST HE LOST PATIENCE DUE TO FEAR ANOTHER MAJOR FACTOR THAT PULLS DOWN THE MARKET . HE SOLD FOR LOSS OF 70 % BUT JUST AFTER A YEAR STOCK NOW TRADING OVER RS 600+