[Disclaimer] : I am no expert in market, neither in technical nor in fundamentals so I am not going to give any tips or for that matter you don’t have to blindly believe what I am sharing here. All of this is my experience and mistakes I made in last 1-2 years of me actively being engaged in equity market.
If you are neither a fundamental expert nor a technical expert like me, you can still make some good returns in share market and all you need for this is Patience and Common Sense. There are always lots of opportunities and all you need is to grab very few of those and hold on and on for long time until you feel that all juice of the particular stock or sector as whole has been sucked up. For this you no need to be an expert as there are multiple credible sources like Mutual Fund owners, Credit rating agencies and individual experienced experts from where you can update yourself regularly and to be more confident try to understand the balance sheet and quarterly results of companies and what are future prospect of that sector and that specific company whose stock you own.
There are certain things I learned and experienced in last 1-2 years and I am sure it must be common to many of people who are regularly involved in equity market. Let me share few of those:
- Do not invest money in market that you are definitely going to need in may be next less than 1-2 year. It simply means try to avoid short term investment as much as possible in market. If you are going to need that money in next less than 1 year then surely that is not long term. I had put lot of money when nifty was around 8500-8600 during mid of 2015, it went upto 9000 and then the great crash happed when market felt down to 6900. It resulted in my portfolio going down by almost 18-20% with around 4 lakh of investment. As I needed that money by start of 2016, I had to book losses despite knowing that markets would recover surely. Only if I didn’t need that money in less than 1 year of investment I would have made some handsome profit by now.
I had many stocks at less than 20-30% of current market price. For example L&T at 1250 , SBI at 180, Axis at 390, Pidilite at 580 ,SREI Infra at 45.Tata Motor DVR at 230, Yes Bank at 700 and many many more. I sold main portion of all these by booking losses or minimal profits only as I needed that money.
- Do not just sell off after making some gains. This was second lesson for me and it comes from being not experienced in this field I guess. Once we get 8-9% gain we start assuming that it is much better than return on fixed deposit and try to book the profit and then ultimately see the stock going up and up every single week. In investment terms it’s called “being Greedy”. I did it many times myself and probably still doing it :). I guess we mature on these things as time goes by and especially when we have a specific goal set related to your financial future. One solution I can think of is may be to have 2 different accounts, one for long term investment and one for short terms or for trading. It might be bit costly but can work out well.
Well these are just few and I am sure many more experiences are yet to come, hopefully of cracking some jackpots aka as Multi-Baggers 🙂