7 rules for stock market investing

In General

Invest in the company not the stock
Take time to study and and research the company by studying its future cash flow projections, its strengths and weaknesses, its management structure as well as acting on your gut feeling.

Be independent
Avoid being swept by the friends or neighbour’s euphoric ideas about certain stocks. Have a proper reason for choosing a certain stock.

Behave like an owner
Think long-term, do not expected to double your money in the stock market in one year, it doesn’t work that way. Choose well and give time for the company’s management to create value over time.

Invest what you can afford to loose
Only use the excess money you have saved for investment. Do not invest money you need to run your daily life since the equity market carries with it significant risk.

Buy low sell high
Buy when everyone else is afraid and sell when everyone else is buying. When the market sentiment is very low and companies’ shares are rock bottom, it is time to buy.

Ignore the noise
Every day you will be bombarded with news of release of best performing stocks, commodities and all kinds of data. Keep your eye on a few indicators affecting where your money is and try to ignore most of the noise in the market.

Diversify
Putting your money in various well researched counters will reduce the risk of loss should the unexpected happen.

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