Reality or unspoken truth
The stock market is stuffed with individuals who know the price of everything, but the value of nothing.
Historically
Generally, stock markets are cyclical in nature – if there is a crash, it will be followed by a rise and vice versa. Therefore, if you buy strong stocks when the market is down, and sell them when the market is on an upswing, you will end up making substantially more profit than someone who sells when the market is down and buys when the stakes are high.
360-degree view
Investment is a field that offers people loads of learning. Firstly, you can either adapt these learnings through your own experience or secondly, you can read and understand the knowledge shared by some legendary investors.
The point to be noted here will be that: While the first route may end up burning you on the path to attaining the knowledge, adhering to the insightful wisdom shared by others will help you easily navigate through the confusing landscape more efficiently and optimally could be an alternate route.
Hard work and Self-belief (confidence)
You must be ready to invest in a market that is falling and willing to sell off and make profits in a market that is rising strongly. While this may sound counterintuitive, let us consider the logic. investment decisions should be made based on hard facts and analysis, rather than just speculating about and forecasting future stock movements. If there is one thing you should know, it is that the market is not predictable. Therefore, do not focus on speculation. Rather, take steps to understand the underlying facts and go with wise decisions.
Investment Mantra
It does not matter whether you are extremely intelligent or not, as long as you are not falling prey to illogical and emotional decisions, your investment journey will remain successful. If you do not learn from the mistakes of those who came before you, you will end up repeating them and making unnecessary losses. So, keep an eye on past investment decisions as well as future criteria for the selection of your next investment.
Over Analysis or achievements:
We have all heard about the importance of diversification but do you know that over-diversification is a catastrophe? If you start putting your money into all kinds of diverse sectors, it will become difficult for you to manage your investments while also limiting the scope of potential returns on any one sector. Therefore, always invest in sectors you are confident about and control your urge to spread yourself across several sectors. Hence avoid over-analysis or over-achievement goals of broader diversification.
Conclusion:
Indian markets after the knee-jerk correction for a few interim months have started witnessing new upside, we could be on the verge of making a new record high where very soon the 20K mark for nifty 50 and 70k (if not 75k) mark for and 50k Mark for could be possible as early as the post Budget session but technically before the current financial year’s ends in March 2023.
However, as discussed in this article and past Learn n Earn series:
Try to focus on the underlying value of a stock, rather than just knowing and considering its price. Unless you have researched or analyzed the company, and its future prospects, you would not be able to zero in on the actual value of the stock and build your watch list for 2023; because if the market () crashes and falls below 15k instead of making a new record high you will be ready with your investment decisions based on Valuation and not speculation.
For more details on creating successful watchlist criteria please refer to the past article published on 14th October under the title “Diwali Muharat: Creating Watchlist is Important & 1st Step Towards Real Investment”
Happy Investing seasons this winter to all those who had the patience to read the entire article and reach here… LoL
Disclaimer: The above article is for self-educational purposes. The research was conducted by the following students: G10, Dimpy, Deepsy, and Anantjil for learning purposes and for developing new algorithm formulas in 2023
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