These
are my ideas on the best course to follow in the often strange place that
market is, combined with some wishful thinking.
1.
Start slow and move steadily.
Do not invest a
lot of money as a beginner. Slowly over a year or two, reach the peak of your
investment. By then you are expected to witness some fall and rise and learn
from it.
2.
Patience, Patience, and Patience.
Overnight no
business makes money, at least such a thing is very rare. In business, good
times follow bad times. If you are in the market for earning
without having to spend time and energy, you rather leave. Most of those who made
money from the market stayed there long-term and they were not day trading. Day
trading and short term in the market takes huge experience and equal amount
of luck to be successful.
Hence you need
to be patient in the market. This is required for two reasons. 1. To stay
for long-term. 2. Not to panic in times of heavy crash / volatility. In 2006
May, June period, one of the most wealthy and well known investor Rakesh
Jhunjhunwala was interviewed by media. He lost many Crores in a few weeks.
However towards the end of that long interview, he reiterated his belief in
the market and the confidence that it will eventually rebound. he has
apparently not rushed to sell his stocks. That is the kind of confidence that is
needed in you.
3.
Ability to predict it right:
Some people
guess right. I am not saying be an astrologer and i don't believe in one. Yet
some people make it out right. This ability to predict it right, comes
over time, from a combination of market wisdom through experience and
knowledge . Over some period of time, it will be great to develop such a
skill.
Inability to
predict the future is not ones mistake. However in the market your ability
to guess things and predict it right will be a great qualification. At least
when the storm started if I had acted, I could have sold my holding in the
middle of May 2006 and bought it back cheap later in early August when the
market begun on a stable road to recovery. I must have either seen the heavy
and incessant fall coming in the middle of May and sold my holdings quickly
or at least started selling immediately after the fall started.
In fact by
August middle, almost all good scrips have started gaining substantially.
Hence my inaction could have upset me only for two months. However for an
investor who is not for long-term (although I would consider myself
long-term), it can be quiet upsetting to watch his money get washed away. I
don't consider my lack of prediction capacity as a mistake but the fact
is, it is a huge advantage to be able to see the future with a fair level of
precision while in the market.
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