Buy for the long term: Control over our emotions especially greed and fear is necessary, having a short-term mentality is dangerous as investors might get stuck in fundamentally poor stocks or at a very high price. Investing for the long term has two advantages, first, you can take advantage of the power of compounding, and second, you can sleep peacefully.
Investors must perform due diligence before investing and invest in those stocks where they have a complete understanding about the underlying fundamentals. One must study the business model, management quality, competitive landscape, financials, and future growth prospects, before investing in any stock. This will help them to separate the wheat from the chaff. This is a basic requirement before investing otherwise mutual fund route is more appropriate.
Understand risks: Good investors never commit money into an investment without total awareness of the risks (and potential rewards) involved. By doing so, they assume full responsibility for the fluctuations that may ensue during the investment life cycle.
3] Enter into quality names: The current scenario, where the environment is full of uncertainty and negative sentiments is the best time to add stocks that have good fundamentals, growth visibility, competitive advantages, and reasonable valuations.
4] Experts' advice: Smart investors don’t shy away from professional advice. This has to be distinguished from the occasional tips and suggestions from your friends and family. That is not professional advice. Seek help from a qualified market professional in making your portfolio relevant to your goals.
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