My 10 Golden Rules of #investment 🧵
A small insight into my learnings over the past 8 years
All Basics - Nothing Complex
For #investing, I follow KISS (Keep it Simple, Stupid)
cc - @dmuthuk, @Vivek_Investor, @FI_InvestIndia for my learnings over time from them
#StockMarket
A small insight into my learnings over the past 8 years
All Basics - Nothing Complex
For #investing, I follow KISS (Keep it Simple, Stupid)
cc - @dmuthuk, @Vivek_Investor, @FI_InvestIndia for my learnings over time from them
#StockMarket
1. Don't invest in something that I don't understand
Financial world is an ocean, there are many instruments ranging from debt to equity to crypto to P2P to ULIPs
I can't invest in everything. I need to pick the ones I understand to have confidence in my investment strategy
Financial world is an ocean, there are many instruments ranging from debt to equity to crypto to P2P to ULIPs
I can't invest in everything. I need to pick the ones I understand to have confidence in my investment strategy
2. Avoid timing the market
No one knows the exact top & exact bottom of the market at any given point of time.
All the marco events which seem huge right now will become micro events in a 10-20 year span of the market. Think about investing as a journey & avoid to time
No one knows the exact top & exact bottom of the market at any given point of time.
All the marco events which seem huge right now will become micro events in a 10-20 year span of the market. Think about investing as a journey & avoid to time
3. Stay away from noise
There are good stocks, there are bad stocks & there are noisy stocks.
It might just be a coincidence (or) a data-driven insight, every time a stock was in the news (or) stories started circulating it creates noise and eventually gets pumped and dumped
There are good stocks, there are bad stocks & there are noisy stocks.
It might just be a coincidence (or) a data-driven insight, every time a stock was in the news (or) stories started circulating it creates noise and eventually gets pumped and dumped
4. Stay Invested (for long-term)
10-20% returns in short term is good, but often one should look at the bigger picture.
Big moves in any stock are made only in less than 5% of the trading days in its lifetime. Only way to catch those gains in by staying invested for long
10-20% returns in short term is good, but often one should look at the bigger picture.
Big moves in any stock are made only in less than 5% of the trading days in its lifetime. Only way to catch those gains in by staying invested for long
5. If it seems too good to be true, it usually will be. Avoid FOMO effect
Many times when the stocks zooms up irrationally .
I sit back and analyze, how true is this ??
Often that has saved me from making bad investments & at insane valuations
Many times when the stocks zooms up irrationally .
I sit back and analyze, how true is this ??
Often that has saved me from making bad investments & at insane valuations
6. Invest in business, not the stock
May be middle-class mentality of seeing the price rather than the item on the food menu, for the initial few years, I looked only at the stock price first
Now, I look at the business and invest in it. The stock price catches up eventually
May be middle-class mentality of seeing the price rather than the item on the food menu, for the initial few years, I looked only at the stock price first
Now, I look at the business and invest in it. The stock price catches up eventually
7. Regular & uninterrupted investments
SIP in my opinion is the greatest ever financial concept made to achieve the long-term compounding.
2 things I follow religiously -
- Regular investment
- Increasing investment (over time)
Allowed me to build a decent corpus overtime
SIP in my opinion is the greatest ever financial concept made to achieve the long-term compounding.
2 things I follow religiously -
- Regular investment
- Increasing investment (over time)
Allowed me to build a decent corpus overtime
8. Reinvest the dividends
Overtime, I recognized that dividends are very powerful and have a capability to create a new income stream in ones journey.
Only way to enhance that is by reinvesting dividends and and building sizeable capital
ONLY MONEY MAKES MONEY
Overtime, I recognized that dividends are very powerful and have a capability to create a new income stream in ones journey.
Only way to enhance that is by reinvesting dividends and and building sizeable capital
ONLY MONEY MAKES MONEY
9. Concentrated Diversification
It looks like any OXYMORON in itself. But the balance of concentration & diversification is very important for generating optimal returns
Concentration allows quality
Diversification mitigates risk
It looks like any OXYMORON in itself. But the balance of concentration & diversification is very important for generating optimal returns
Concentration allows quality
Diversification mitigates risk
10. Avoid Debt in the journey
Last but not the least. I learnt the hard way to avoid debt in the journey. Started my career with huge family debt which took ~12 years to clear (not 100% yet) and only way to avoid is being self sufficient
Build corpus first & enjoy wishes later
Last but not the least. I learnt the hard way to avoid debt in the journey. Started my career with huge family debt which took ~12 years to clear (not 100% yet) and only way to avoid is being self sufficient
Build corpus first & enjoy wishes later
I thank
My parents for giving such a wonderful life
My family for being supportive through this journey
My Nation for everything
My mistakes for teaching me the learnings
My fellow investors for the wisdom through their learning @dmuthuk @Vivek_Investor @FI_InvestIndia
My parents for giving such a wonderful life
My family for being supportive through this journey
My Nation for everything
My mistakes for teaching me the learnings
My fellow investors for the wisdom through their learning @dmuthuk @Vivek_Investor @FI_InvestIndia
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