One say's "I bought
"XYZ Company" àt Rs.2200 & immediately after î bought thé stock price
dropped tô Rs.2OOO." î feel sad. Another comes wîth à different version
"I sold "XYZ Company" àt Rs.2OOO & ît went up tô Rs.2400 same evening"
I made àn imaginary loss ôf Rs.400 per share.
Solution:
You càn buy more
shares @ Rs.2OOO & reduce yôùr overall buying cost. This hàs tô bé
done only îf believe în thé fundamentals,management & thé future
prospects ôf company.
To dô thîs yôù
need tô keep money ready.whatever money yôù hàvé & want to
invest,split ît into two parts. Then keep 50% cash
aside, only invest wîth ôthér 50%.So îf need tô buy more ôf àny stock
when thé price falls yôù hàvé ready cash.
Also nôw îf yôù hàvé 200 shares ôf XYZ Comp. 100 @ Rs.2200 & 100 @
Rs.2OOO.Then thé price goes up tô Rs.2400. Sell only 100 ôf
shares.Then îf thé price further shot up, yôù hàvé sômé shares tô sell
And participate în thé rally tô make money.
Next, You sold thé
share & thé price went up. The solution tô thîs îs never sell àll thé
shares àt ôné time. Sell only 50% ôf yôùr shares.So îf hé price goes up
later yôù still hàvé thé ôthér 50% tô sell & make profit.
The golden Rule îs
to first dô yôùr own analysis ôf stock before investing &
buy ôn tips.
Also invest only în companies whîch declare dividends every year.
To bé sure thàt yôù àré not investing în loss making companies.
Every Market
expert advise tô dô yôùr stock analysis before investing în thé stock
market. But nobody tells yôù how.
Well în my next
article î will write about hôw tô do
stock
analysis using various tools such às financial ratios
and ßy checking thé track records ôf companies yôù plan tô invest
in.
