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Topic : Playing Safe In The Stock Markets...
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Started by : Esha Johar, Risk Analyst, Irevna   07 29 2010 11:12:50 +0000
Industry : Investment BankingFunctional Area : Capital Management(Corporate Finance)
Activity:  93 views;  last activity : 09 10 2010 02:05:17 +0000

Before investing, it is imperative that you have money to set aside for such purposes. This means income beyond that needed for your living expenses. Once you have an amount that you can invest, it is up to you to focus on your investment objectives. But sometimes we all make mistakes that are irrecoverable....

So, what are the invest mistakes one should avoid??

 
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1 2 3 4 5
1 Looking for instant results
2 Not understanding a particular investment
3 Be a long term investor
4 Going by the past performance rather than present phase
5 Investments
6 Greeding or longing for more profit
7 To be over careful
8 Not following your investments
9 Investing for long time when market is on Its peek.
10 Analyse the background of the share and its co., from u r buying the shares.
11 Contingent claim
12 Do not invest on unknown tips
13 SELLING is as important as BUYING
14 Do NOT get attached to a Stock, sentimentally.

Looking for instant results

idea posted by Esha Johar Risk Analyst, Irevna

Most investments take time to grow, particularly if you are invested in the stock market. Too many investors make the mistake of getting easily frustrated and selling quickly. While there are successful day traders, it is not recommended for most people and not the way to build an investment portfolio.

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by S SundaraVaradan, Freelancer, Freelancer  | 08 02 2010 19:47:09 +0000

Yes; waiting is important. To take an example, there are 1 season planting & harvesting (small Caps); 1 or 2 year harvesting bushes (Medium caps) or Long lasting tree plantation, bearing fruits (Large caps). depending on 'how long' one can wait and expect type of returns, the waiting period as well as the fruits harvesting, varies!

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Not understanding a particular investment

idea posted by Rashmi Patil Financial services

We have all heard stories of individuals who have been talked into investing in futures or other investment vehicles that they did not fully understand.

Make sure you are having an understanding of the type of investment and you are comfortable with the risks involved before proceeding.

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Be a long term investor

idea posted by Harmohan Kawatra Freelancer

I am an investor since late 60's. More than 50% of shares i invested in became junk (mainly due to greediness of promoters). However remaining good investments multiplied many fold over time, giving me a very healthy returns indeed. I have full financial security in my retired life. Be bold, invest wisely but for long term and follow only your own advise and not of so called experts.

This is from my personal experience. 

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by S SundaraVaradan, Freelancer, Freelancer  | 09 10 2010 02:05:17 +0000

I agree! I am also a long term investor since 1975. I tried top Portfolio Management services,too. Finally, MY own judgements prooved superior, in the long run! I was surprised! I also make data based research. I am dependant on many sources of Stock data and cross verify them, sort them and take Long term decisions on BUY/SELL.

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Going by the past performance rather than present phase

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by Srinivas suravajhala, Asst. Manager.  | 08 04 2010 08:25:45 +0000

Most of us invest our hard earned money into the companies by looking at their past performance, ignoring the phase through which the company going through.  The present phase is also an important factor.  The ability of the company to bounce back if it going through a rough phase to be assessed and also looking at the personalities at the top management before investing.

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Investments

idea posted by Satej.Phatak Accounts officer, ANZ Banking

Invstments need to be tracked from our end, as the service sectors are again booming up one need to make sure,his/her money is invested smartly. debts are also turned out to be good returns for investments as compare to equities as looking into current inflation it would be secure to invest in govt bonds if aged above 45 yrs. Teens especially now a very good chance to invest in equties.. 2011 market is really going to boom up..

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Greeding or longing for more profit

idea posted by Arun Kumar K Security/ Equity Research Analyst, Thomson Reuters

Greeding or longing for more profit is a common mistake in investments. Investments are like treasure mines. We greed more and more for wealth as we keep on digging the mining field very deep. But the fact is when we greed more and keep on digging we will not get anything & all our efforts will go in vein. Likewise in share market investment when we greed for more profit & keep waiting for price to go up, we will end up in loss as a result of price down. So in order to avoid this we have to be content with reasonable profit & sell the shares at right time & not to wait for price to go up further.

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To be over careful

idea posted by Shashi Kumar U Manager accounts & commercial, Mazda Concrete Products Pvt Ltd
Over caution or to be over careful and miss out the most important part of the investment. Every investment has it's own risk factor so one has to take the chance.
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Not following your investments

idea posted by Swati Raut Product Manager, Aviva

I agree with Rashmi & Esha here...I would like to add another idea here.

Many people pay attention to their investments for a while and then make the mistake of getting sidetracked or losing interest. You should keep track of your investments on a regular basis.Not following your investments.

Many people pay attention to their investments for a while and then make the mistake of getting sidetracked or losing interest. You should keep track of your investments on a regular basis.

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Investing for long time when market is on Its peek.

idea posted by Vinod kumar MBA (Finance) student, Punjab College of Technical Education
Investers sometmies not able to understand right time for investment..for ex..if u r investing in that time when market is already at higher side it could not be the right deceision for long term investment...beacuse that time will get the investment product at high prices and when u sell it..it will not give u good profit.
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Analyse the background of the share and its co., from u r buying the shares.

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Contingent claim

idea posted by Mathew Cherian Research Associate/Analyst, Western Michigan University

Financial market is one place where one uses it as Insurance against contingencies arising in personal life. Modern economies like G8 nations are designed for this purpose and they are termed 'contingent claim economies'. Countries where the systemic riks is high this is the only way one can hedge these risks like inflation qnd other needs arising from time to time.

The government should be equaly condescending in providing the commercial environment and markets for the nation such that companies can perform and thrive so that they become a source for the citizen who are investors and their contingent claim state is riskless.

Mistakes one makes in investing is not knowing what ones rate of return is, what the risk level one can go to, not analysing performance of companies they invest in.

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Do not invest on unknown tips

idea posted by Dr. Izzat Husain Associate/Senior Associate, Belford University, on line University

Do not invest in share market if you find a SMS or mail from unknown persons. Such mails/SMS gives you tips to fetch your money through scams.

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SELLING is as important as BUYING

idea posted by S SundaraVaradan Freelancer, Freelancer

For every Stock (even the best ones) has a buying limit and SELLING Limit, based on the waiting period of Investment (3year, 2 year, 1 year horizon).

For each Stock, in a given country/ interest regime, these limits vary based-on various factors like P/E ratio, P/BV, Growth etc.

A long term investor, also need to SELL at the right time/Price!

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Do NOT get attached to a Stock, sentimentally.

idea posted by S SundaraVaradan Freelancer, Freelancer

Many investors have found that they love a particular Stock, for reasons like: issue of regular Bonus, Dividend yield, Rights, consistent growth etc., in the past.

But, one should NOT get emotionally attached to any Stock. We are their only for Investment returns.

We should know, when to call it 'quits', based on company data. Past performance is not assured in Future!

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