Famous Philosopher Confucius said that life is very simple, but we keep trying to make it complicated. He should also add finance to this theory. Whenever it comes to simplifying economic life, people often make mistakes. Believe it or not, simple and simple plans can be best for you.I have often seen that new investors are attracted towards equity. The fault is not theirs. Such reports are often heard that some stocks gave a 25% return in the last quarter or the company’s shares increased by 30% last year. For those who invest in equity for the first time, it is very difficult to understand where to start from. They also do not understand the difference in investment in equities and funds.
For investors who want to invest in equity, I recommend to use the least investment method. Many times people are surprised at my opinion. But well-known investor George Soros has also said that if you are enjoying investing then it will be entertaining for you, but probably will not make money for you. People have different opinions on how to invest. I like to follow basic principles.
Identify Greed:
If a stock has performed very well in the short term, then depending on that, you do not decide on the investment. By remembering this formula, you can avoid risk assets. Often such stock bubbles are prey. That is when they are afraid to burst their balloon. Even if the balloon is not broken, the returns in the long term get less.
Be patient:
There is no way to make the market rich immediately. If someone says so, then it is neither investment nor trading, it is gambling. Making a little profit for a long time is better than the risk of making big profits in a short period of time.
Do not panic:
Our tendency is instant gratification. Fear of loss we are satisfied with small profits. With this thinking you cannot build assets in the long run. However this thinking comes with experience and maturity. So, it is better to stay away from equity unless you are ready to do a special effort. The second option is to invest through mutual funds. Three things should be taken into account –
Understand fund’s goals.
Make sure that the fund is according to your trend of taking risks or not. The asset allocation of the fund should be in different mediums. This will reduce the risk of the scheme.
See fund manager’s profiles and old experience. It is also how his other schemes have given returns.
Creating complex charts and creating a brain-collapse calculation is not necessary. Many ways of smart invoicing are easy and old. Your investment strategy should be easy, but discipline and patience are equally important with it.