|Old article being reposted…….appeared on the www.myiris.com website..
I have been inundated with calls from friends and students on what an investor should do when he or she is staring at blood in their portfolios.It reminds me of the saying — ‘this too shall pass’. I do not know its origin, but am convinced that in investing, as in life, you should keep your cool.This advice is, of course, meant only for long-term investors and not for traders. So, go ahead and use these tips:
1. Be conservative.
If you thought the Reliance Power issue was over-priced, do not apply ‘hoping’ it will open at a premium.
2. Learn from the best.
Classic investing books or conversations with trustworthy individuals will always prove to be useful. Devil take the Hindmost: A history of financial speculation by Edward Chancellor, a classic book about rising and falling markets, could help you understand the reason for the volatile market.
4. Debt funds are useful for capital protection.And capital protection partially is a fantastic thing to seek. But remember capital protection is not growth.
5. Simple, dull, boring businesses give very good returns.Banking is one such business. You need not invest in biotechnology, aerospace engineering, and the likes! Peter Lynch, a Walltreet Street stock market investor says, “Never invest in any idea you cannot illustrate with a crayon.”
7. Buy umbrellas in the summer.
Sir John Templeton, stock investor, businessman and philanthropist.
10. Buy when you are panicking. Sell when you become overconfident.
11. Investing is about common sense.
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