As you are aware that stock market trading carries certain amount of risk. So, before you proceed further to take decisions about stock market investment, please ask the following questions to yourself:
-Am I ready to stay invested in stock market without getting worried about daily ups and downs of the stock prices?
-Do I have a major source of income which allows me to invest a small percentage in stock market?
-Have I already invested enough money in more reliable investment options like PPF, Bank FDs, Gold, Real Estate, etc.?
-Do I have good control over my instincts and can I follow some golden rules for stock market investment?
If your answer to the above questions is “YES”, please proceed further and read the below mentioned Arvind Bajaj’s guidelines or golden rules or Arvind Bajaj methods of investing (that I follow myself) to be imbibed before you invest in stock markets:
1. Invest your own money / capital in stock markets.
2. Make sure your family’s basic needs are fulfilled before setting aside some capital for investing in stock markets.
3. Investment in stock market should be done only after you have done secured investments in PPF, Bank Fixed Deposits, Gold, NSCs, etc.
4. Never take a loan (personal loan or from friends) to invest money in stock market.
5. Invest maximum 5% of your capital in any one particular stock after your own analysis.
6. I always consider technical views for a stock in addition to fundamental analysis of a company before investing in it’s shares. The same would be applicable to all.
7. If you are following views of others on some stocks, do it properly after carrying out your own research & analysis.
8. Check out news and updates related to every stock on a daily basis on this blog site. It will help you to understand my stock views and when I enter, re-enter or exit any stock to balance my portfolio.
9. Do not get affected by some price dips in stock markets as they require patience and if you don’t have it, please do not invest in stocks. I try to follow the policy of announcing when I enter a particular stock along with my own targets for the stock for my personal tracking. I always try to keep targets for myself and my stocks for a long-term period as I do not believe in short-term trading.
10. Do not average out significantly in any stock as it would often result in investing more than 5% capital in that stock.
11. Whenever you invest money in stock market, assume you have invested with a lock-in period of 2-3 years. You would mint in tonnes if you think long term.
12. Never invest capital that you will need back in few months time in the stock market. It could put unwanted pressure on you.
13. Always remember that stock markets are just a good investment alternative that could fetch you amazing returns. Never rely on it for your main source of income.
14. Whenever target is achieved in any of the stocks based on my analysis, I generally sell shares (of that company) equivalent to the amount invested to earn profit and stay invested in the remaining shares of that company as bonus shares for long term. Keep following the relevant stock pages on this blog to avoid missing such updates about my personal stock views.
15. The profit you make in stock markets can be used to re-invest when the markets become bearish.
16. Never run away from a bearish stock market as people who invest smartly during bearish markets are the ones who mint more money when the markets become bullish. Always remember that it’s a cycle; whatever goes down will come up one day.
17. It is always important to keep track of the current trend in stock market. For example, you need to keep yourself ready to sell some slow-moving stocks (for companies which might not have some good announcements or results) and re-invest in a better stock after few days / weeks / months of initial investment. If you check our blog regularly for the stocks that I have invested money in, you will understand how I do it.
18. Do not greed more even if market is over-bullish and stick to above golden rules with regards to stock market investment.
19. Keep following this blog if you want to know how I mint money with my own technical views. Please learn to do analysis of your own before investing your money in stocks or consult a certified financial advisor (as I am not a certified financial expert or stock broker or authorized stock analyst).
20. With proper followers, regular reading and learning, we can become the largest and happiest group of investors in Indian stock markets.
21. To always develop a bullish outlook, keep reading motivational books like “The Secret” or watch movie with the same name.
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