Rules to be Treasure Life Long While Investing and Trading in Indian Stock Market


#1

Someone has sent me this message which talks about the golden rules of investing and trading in Indian Stock Market. I guess If I had known this earlier I would have definitely saved few lakhs of rupees.

These could be read again and again. Every time you read you would get something new to learn.

:eight_spoked_asterisk: 80% of gains come in 20% of the time. So an investor needs enormous patience and conviction to hold stocks or Mutual funds for 10 or 20 years.

:eight_spoked_asterisk: Why not all investors get rich? They like to get rich without going through many years of discipline & patience. The process leads to an outcome.

:eight_spoked_asterisk: An inferior strategy you can stick with is likely to produce better results than a superior strategy you cannot stick with.

:eight_spoked_asterisk: Prices change frequently. Value change over a period of time. There lies the opportunity.

:eight_spoked_asterisk: Compounding is backloaded. It works well only over a longer period of time. There is no substitute for time in compounding.

:eight_spoked_asterisk: 99% of the time, doing nothing is the best thing to do in the market. It is good to be a Rip Van Winkle investor. Activity hurts. Sit still.

:eight_spoked_asterisk: You cannot predict or control markets. What you can control is how much you save, investment process and behavior. Focus only on that.

:eight_spoked_asterisk: The random outcome doesn’t invalidate the need for a process. Sound process and consistently sticking to the same increases the chance of luck.

:eight_spoked_asterisk: Investors are human. That’s why markets would never be fully efficient.

:eight_spoked_asterisk: Markets usually run ahead or fall behind. Rarely in equilibrium. Over or undervaluation can last for a long time. Don’t time the market.

:eight_spoked_asterisk: Buying and selling is easy. It is holding on through ups and downs is difficult but ultimately most rewarding.

:eight_spoked_asterisk: Tiny drops of water make the mighty ocean. Invest regularly. Invest for a long term. You can create huge wealth.

:eight_spoked_asterisk: Not investing in equity is riskier than investing in it. Remember, you need to beat the inflation and retain your purchasing power.

:eight_spoked_asterisk: We see past bear markets as missed opportunities. However, thinking of future bear markets is gut-wrenching. Strange investor psyche.

:eight_spoked_asterisk: If someone keeps reviewing the value of his house every day, we may suspect his mental health. But that’s what we keep doing with our equities.

:eight_spoked_asterisk: Equity investments are subject to behavior risks. Always keep a check on your emotions while investing.


#2

Below is how the Market Crash Acts and Reacts. Most of the time the bottom fishing leaves many left out. Keep some spare crash and stay invested all the time.

-1% Mock the permabears
-2% Meh
-3% Yawn
-4% Off the highs
-5% Pullback
-6% Healthy correction
-7% Buying opportunity
-8% Stay the course
-9% This too shall pass
-10% Correction territory
-11% I’m a long-term investor
-12% Stocks always come back
-13% Don’t panic
-14% Draw lines on a chart
-15% Look for attractive valuations
-16% I knew this was coming
-17% Blame Cramer
-18% This sucks
-19% I should buy some downside protection
-20% Bear market
-21% I should have listened to my gut
-22% Buy when there’s blood in the streets
-23% I was early
-24% Is this the bottom?
-25% This sucks
-26% Uggggh
-27% I can’t take this much longer
-28% I sold my stocks
-29% I’m never buying stocks again
-30% Good thing I sold
-31% I should buy gold
-32% And silver
-33% I don’t even care anymore
-34% Glad I stopped looking
-35% Bottom