How Do You make Investment Decision
The fact is that most of us do not really know how to invest in stocks. We either buy too late or sell when the decline has already started as a result of which over 95% of the people end up losing money. Moreover, due to the way the markets have operated in the recent past, it is just not possible to pick a winner every time. Hence, the strategy of holding your stocks does not guarantee excellent result. Always remember that you may take years to recover from even a 25% fall in the value of your portfolio.
Hence, do not rely on experts and learn the rules of the game yourself. Invest in a wide range of debts and equities to get the best possible result. Do not invest heavily in the share market as individual do not usually make money. Certain people feel that they have made a lot of money from the share market, but when you check the exact price at which they bought stocks and the price at which they sold and the time duration involved, you realize that most people do not make more than 8-10% per annum.
Therefore, the best course of action is to invest in the following manner:
- Invest a part of your money in debt, where it is absolutely safe and you get a fixed every year.
- Invest a part in Systematic Investment Plans and bonds. This is the place from where you will get the maximum return though the risk involved remains on the lower side.
- Invest in unrelated goods like antiques, paintings and gold. The return can vary but rest assured that the overall return will be on the higher side.
Do remember that you need to be careful at all times and invest and reinvest at regular intervals.