Thread by @bullish_india

Lessons that the stock market always teaches us: -

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In recent years, Indian stock markets have experienced a significant uptick. The Nifty recovered from the panic-induced trough reached in March 2020, when it was nearly 8,000 to 18,600. So, it has given us enough lessons to be learned.

1. Avoid attempting everything and everywhere at once:
Decide on a look, then stay with it. Your chances of failing dramatically increase if you frequently alter your appearance to fit the most recent trends.

Financial stability may be harmed by timing the market and repeatedly changing one's investment strategy in accordance with popular trends.

2. In the stock market, don’t trade for revenge:
Revenge trading is when you place one or more trades to try to make up for a big loss from a prior trade. Our first reaction when we lose money on a contract is to try to make up for it.

Because our desire is so powerful, we occasionally make foolish decisions. While neglecting our tried-and-true trading strategies, we are engaged in larger transactions.

People consequently act impulsively in an effort to take "revenge" on others. You are aware that making irrational trading decisions almost always has a negative outcome.

3. Surprise-filled Street:
Just when you think you have the answer for the stock market, your algorithm fails—and you better believe it fails horribly. The best way to express it is that I believed I knew all the answers, but God changed the test.

4. The perfect moment will always come in the market:
There are numerous opportunities to generate money on the market. Throughout multiple market cycles, some businesses fare better than others.

They can be categorized as garbage stocks, low value, high quality at any price, high quality at a fair price, or stocks with little potential for growth. There is no guarantee that the strategy you choose will continually perform better.

5. In reflection, everything is much more logical:
Ironically, looking back, it is easier to identify if the market is in a risk-on or risk-off phase. Until the end, it is impossible to say if the present downward trend is a correction or a trend reversal.

6. Not a single cent more or less:
Good companies may not necessarily have good stocks to purchase. Stock that thrived during the bull market will see their value drop during bear market.

If you buy great stocks for less than you should, you will pay for them in the long run. Frustrated investors will pull out as soon as returns start to accumulate.

Watching your portfolio stock do nothing while everyone else is having fun is the most frustrating thing in the world.

7. Fall and windfall:
The market can function in two different ways: when there is risk-on and when there is risk-off. Commodities and rate-cycle sensitive stocks are examples of "risky stocks" that perform well when the market is in a risk-on phase.

But defensive stocks like FMCG and medical come into play when the market is in a risk-off stance when there is a sideways or bear market, or both.

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