By:- CA Rakesh Kumar singhal
1. NEVER INVEST JUST THAT SOMEONE ADVISED YOU TO INVEST.DO
NOT DEPEND ON TIPS.
2. STUDY THE COMPANY'S BUSINESS MODEL AND SCOPE OF FUTURE EARNINGS AND
SPECIALLY GENERATION OF FREE CASH BY COMPANY.(FREE CASH MEANS PROFIT BEFORE
DEPRECIATION BUT AFTER TAX AND ADJUST WORKING CAPITAL INCREASE AND DECREASE
BETWEEN DATES OF COMPARISON) NET EFFECT WILL SHOW THE REAL CASH GENERATED BY
COMPANY.REMAIN CAUTIOUS WITH COMPANY WITH VERY HIGH PE RATIO AS COMPARED TO
PEERS AND INDUSTRY.
3. CHECK THE INTEGRITY OF PROMOTERS.
4. NEVER INVEST ON THURSDAY IN RISING MARKETS AS ON FRIDAY
BROKERS PULL THE SHARES DOWN
5. INDIAN STOCK MARKE IS TRIPLE SANDWICHED AMONG USA (CLOSING
AFTER MIDNIGHT)–FOLLOWED BY ASIAN IN THE MORNING AND THEN MID DAY BY EUROPEAN
AND HENCE THEY IMPACT OUR MARKETS.KEEP A TRACK ON THESE MARKETS.
6. READ MAIN NEWS PAPERS LIKE THE ECONOMIC TIMES/SITE LIKE
MONEY CONTROL TO KEEP WATCH ON NEWS RELATED TO STOCK SPECIFIC COMPANIES.
7. AVOID PLAYING INTO DAY TO DAY TRADING AND F & O
UNLESS YOU HAVE SURPLUS MONEY AND EXPERTISE.
8. INDIAN ECONOMY DEPENDS ON OIL PRICES-GOING UP GOOD FOR
USA BUT NOT FOR INDIA.
9. IF YOU ARE SITTING ON GOOD PROFITS THEN TRY TO COME OUT AROUND
DIWALI DAYS AS MUTUAL FUNDS AND FIIs LIQUIDATE SOME PERCENTAGE OF THEIR HOLDING
7 TO 10 DAYS BEFORE CHRISTMAS FOR DIVIDEND DISTRIBUTION TO INVESTORS.
10. INVEST IN COMPANIES HAVING REGULAR GOOD VOLUMES ON DAY
TO DAY BASIS AS IT IS EASY TO COME OUT WHEN YOU NEED MONEY.
11. BE CAREFUL AT THE TIME OF BUYING AND SELLING THOSE
SHARES WHERE THERE IS WIDE GAP BETWEEN SELLING AND BUYING PRICE QUOTES.
12. AND LAST A WORD OF CAUTION.STOCK MARKET CAN GIVE
UNEXPECTED JERKS SO PLEASE MAKE SURE YOU HAVE SUFFICIENT FUNDS PARKED SAFELY TO
MEET YOUR DAY TO DAY EXPENSES FOR SURVIVAL.
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