1. What must I do now is a question every equity investor should ask himself whenever the stock market moves to dizzying heights and suddenly falls to low levels.Undertake following actions to ensure optimum profit from the market as given in succeeding paragraphs.
2. Don't panic as the market is volatile in nature and is composed of emotions. If the prices of one's shares have plummeted, there is no reason to want to get rid of them in a hurry and stay invested if nothing fundamental one's company has changed.
3. Don't make huge investments initially and Whenever the market dips, go ahead and buy some fundamental stocks. Pick up the shares in stages/ periodically to average one's costs. Invest small amounts gradually via a Systematic Investment Plan.
4. Don't chase performance A stock does not become a good buy simply because its price has been rising phenomenally. Once investors start selling, the price will drop drastically.
5. Don't ignore expenses i.e When one buy and sell shares, one will have to pay a brokerage fee and a Securities Transaction Tax. This could nip into one's profits specially if one selling for small gains (where the price of stock has risen by a few rupees). If one sells his shares of equity funds within a year of buying, one end up paying a short-term capital gains tax of 10% one's profit. If one sells after a year, one pay no tax (long-term capital gains tax is nil).
6. Get rid of the junk stocks if they are showing a profit.
7. Diversify and Don't just buy stocks in one sector.
8. Believe in one's investment Don't invest in shares based on a tip, no matter who gives it to you. Look at the fundamentals and analyse the company and ask oneself if you want to be part of it. ? If yes, consider investing in it.
9. Stick to one's strategy i.e If one decided to invest only 70% of one's investments in equity, don't over-exceed that limit just because the stock market has been delivering great returns.
2. Don't panic as the market is volatile in nature and is composed of emotions. If the prices of one's shares have plummeted, there is no reason to want to get rid of them in a hurry and stay invested if nothing fundamental one's company has changed.
3. Don't make huge investments initially and Whenever the market dips, go ahead and buy some fundamental stocks. Pick up the shares in stages/ periodically to average one's costs. Invest small amounts gradually via a Systematic Investment Plan.
4. Don't chase performance A stock does not become a good buy simply because its price has been rising phenomenally. Once investors start selling, the price will drop drastically.
5. Don't ignore expenses i.e When one buy and sell shares, one will have to pay a brokerage fee and a Securities Transaction Tax. This could nip into one's profits specially if one selling for small gains (where the price of stock has risen by a few rupees). If one sells his shares of equity funds within a year of buying, one end up paying a short-term capital gains tax of 10% one's profit. If one sells after a year, one pay no tax (long-term capital gains tax is nil).
6. Get rid of the junk stocks if they are showing a profit.
7. Diversify and Don't just buy stocks in one sector.
8. Believe in one's investment Don't invest in shares based on a tip, no matter who gives it to you. Look at the fundamentals and analyse the company and ask oneself if you want to be part of it. ? If yes, consider investing in it.
9. Stick to one's strategy i.e If one decided to invest only 70% of one's investments in equity, don't over-exceed that limit just because the stock market has been delivering great returns.
