Question

What should a good investor always remember when they are trading?

Answer 1

There are risks in investment, like systematic risk in stock market, the risk of liquidation, etc. Therefore, following things to be remembered while trading:

1) Adequate plan: There must be adequate plan before investing. The whole investable money should not be invested in a single project that gives higher returns in quick time; this kind of investment must have higher risk; such investment could be taken as experimental basis by investing a small amount of money, because if there is loss the investor may not suffer much.

2) Emotion: Investment by the force of emotion may create blunder. There should not be any following attitude, like someone is doing better in the stock market; it doesn’t mean that I too will do better there. Investment should be made if there is any practical sense of investing, such as prospects, profitability, and future plan about the project.

3) Learning attitude: The investor must possess this mentality; it gives immense scope of future success. The Ups and downs of share market is also a learning curve of investor.

4) Tips: Tips may be taken sometimes but this is not a solid pillar of success. Therefore, an investor may take tips but follow as per own expectation, calculation, and belief.