Thursday, March 31, 2016

VIJAY KEDIA’S 10-POINT FORMULA FOR SUCCESS IN STOCK MARKET


VIJAY KEDIA’S 10-POINT FORMULA FOR SUCCESS IN STOCK MARKET
(i) Never be dependent on the stock market for your livelihood or day-to-day living. Have an alternative source of income. This will insulate you from the volatility of the market and give you holding power;
(ii) Never buy a stock except after thorough study into the stock’s fundamentals. The stock market is not a gamble. You must also be fully aware of news and developments that affect your stocks and learn to “connect the dots”;
(iii) Invest according to your risk profile. Ensure that other asset classes also have an allocation. This will again insulate you from the risk that equities carry and give you holding power;
(iv) Never trade in stocks. Never use borrowed funds to buy stocks. It is extremely risky and can lead to “instant death”. Less than 1% of the trading population makes money. Also, trading requires special aptitude which a normal person lacks;
(v) Invest for a minimum period of five years. “Rome was not built in a day”. It takes time for companies to mature and grow;
(vi) Invest only in the best managed companies and don’t worry about day-to-day volatility in stock prices;
(vii) Remember that the “Investment belongs to the market and only the profit belongs to you”. In other words, don’t get carried away by notional and paper profits;
(viii) Book profits periodically. When a stock looks overvalued, don’t hesitate to cash in the gains;
(ix) Be balanced in your approach. Don’t be very optimistic in an uptrend and very pessimistic in a downtrend. Also, never have regrets;
(x) Do good karma and be a good human being. Stock market is a mind game. Good deeds will ensure that your mind is calm and is able to think rationally.