23 tips on how to be successful in stock/share trading

Investment in Shares/Stocks
Investment in Shares/Stocks are giving very good returns over a longer period of time. However it is not that easy to earn good returns by every investor or a trader.

 

 

 

23 tips on how to be successful in stock/share trading

  1. If you are new to investing, invest in smaller amounts till you feel comfortable in investing.
  2. Selecting a good quality stocks is a challenge. Spend more time on analyzing what to buy?
  3. Know your risks in investing in stock market before making any investments
  4. Stock market provided returns of 35% p.a. on an average in the last 10 years. Invest for longer term to get such benefits
  5. While selecting the stocks, see the track record. E.g. Reliance Industries was a good stock, but in the last few years, the stock is not providing any returns. Stay away from such stocks
  6. Don’t invest in a single stock. Diversify and invest in more than one stock
  7. Buy the stocks when others are selling and sell the stocks when others are buying. We generally follow opposite rule and loose money
  8. Diversify the stock selection across sectors. E.g. instead of investing in only banking sector like buying SBI, ICICI, BOI, Canara Bank etc., try buying from various sectors
  9. Try checking the stocks which mutual fund companies are buying. This gives an indication what mutual funds companies are interested and where they are investing
  10. While selecting the stocks, check the FII (Foreign Institutional Investors) share. Don’t buy the stocks where FII share is on higher side. FII’s can quickly sell such stocks and would come out in case of any global crisis.
  11. Don’t invest in lump sum amount. Invest in regular intervals so that market up and downs are not effecting your investment
  12. Don’t buy penny stocks (stock values < Rs.5). You would end up loosing money if you invest in such stocks
  13. Don’t invest for short term. Many investors invest for short term and would come out of market with losses. This is not the place for short term investors and traders.
  14. Buy a stock after your analysis. Don’t buy the stock because some broker has recommended or just because there is increase in the share price
  15. Make your portfolio for say 5-10 stocks. If you invest in too many stocks, tracking them would be difficult
  16. Watch for cyclical changes in the market e.g. try checking the stock movements before and after the budgets are presented by Govt of India. You would see huge variances during that time. Based on the Govt. budgets, the sector as well as the stock performance would depend.
  17. In case the stock price of the stocks purchased by you are falling say < 30% of the purchase price, try checking the reasons. In case this is only due to market movements, ignore it. In case this is due to change in stock fundamentals or consistent stock low performance, try exiting the stock.
  18. Track your portfolio once in a month to see the performance of the stocks you have invested
  19. Keep an eye on the stock market support and resistance levels. If the stock market is going lower than the support level, wait and watch before making a fresh investment.
  20. During volatile market, avoid the trading. You can loose the money if you try to make money during this time
  21. If you have a low risk appetite, try investing in best bet sector like FMCG, HUL, ITC etc., However the returns would be on lower side
  22. Stay away from sectors which are not performing well e.g. Sugar sector
  23. If you are planning to invest based on an advice from a stock broker and from a financial planning advisor, check the past record for them. If the past performance is not good and you still believe that the advices given by them are good, you may end up in loosing money

What are the top stocks to BUY for 2012?

Below are the top 12 stocks which one can analyze and purchase for 2012. Though stock market gave a -9% (Negative) returns in the last one year, these 12 stocks gave 10%+ returns.

COMPANY

27-Jul-12

27-Jul-11

CHANGE%

52-WEEK HIGH/LOW

BSE SENSEX

16839

18432

-9%

18,579 / 15,136

HINDUSTAN UNILEVER

465

326

43%

478 / 309

AMBUJA CEMENT

182

131

39%

184 / 120

ACC LTD

1294

996

30%

1,422 / 936

ITC LTD

255

201

27%

260 / 185

GRASIM INDUSTRIES

2700

2166

25%

2,928 / 2,015

SUN PHARMA

632

517

22%

645 / 449

HDFC BANK

585

502

16%

594 / 400

KOTAK BANK

530

463

14%

613 / 411

ASIAN PAINTS

3506

3143

12%

4,191 / 2,550

HERO MOTOCORP

2010

1805

11%

2,279 / 1,704

TATA MOTORS

213

192

11%

321 / 138

BAJAJ AUTO LTD

1583

1434

10%

1,843 / 1,356

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Suresh
Myinvestmentideas.com

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