Some of my learning from investing:
- If your family is not risk oriented / risk understanding it is difficult for you to invest / trade in equities.
- Investing maybe a part time activity, but equity trading is a full time activity.
- If you cannot make equity trading your full time activity, DO NOT make it a hobby. It is too damn expensive.
- See how a person reacts to a significant loss based on your trading ideas. If it a relationship spoiler, do not do business with him.
- Beware of dentists, florists, driver, barber, vet, dietician, – anybody who wants to give you tips.
- You can spend a lifetime in learning who is a good ‘tip’ provider. In most cases it is goodamn luck.
- Only liars get the bottom and top of the market. Retail investors get the top for buying and bottom for selling. Normally.
- A fund manager can average Icici bank from Rs. 300 to Rs. 1200 and on the way down to Rs. 400. YOU CANNOT.
- As a trader stop losses are important. As an investor averaging MAY work. Only experience tells you which to use when.
- Have a small number of securities. Have enough confidence to stake at least 5% of your equity portfolio in one share.
- Learn to take losses quickly, cleanly and without a baggage. However write down the learning in a book.
- There is not much to learn in debt investing as long as you stick to Post office / bank deposits, but learn about inflation.
- Long term tax in equities is NIL. Dividends are tax free. Use this knowledge to increase your wealth substantially.
- Create a nicely balanced portfolio and have it reviewed by a sensible investor.
- Past experience and data is useful as a guide, not as something cast in stone.
- Do not lose your friends, spouses, parents, money anywhere. The tensions are not worth it. Intentions do not matter.
short work for a Sunday !!
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