One says’s “I bought “XYZ Company” at Rs.2200 and immediately after I purchased the stock price dropped to Rs.2000” I feel sad. Another comes with a different version “I sold “XYZ Company” at Rs.2000 & it went up to Rs.2400 same evening” I made an imaginary loss of Rs 400 per share
Solution:
You can buy more shares @ Rs.2000 and reduce your overall buying cost and this has to be done only if you believe in the fundamentals, management, and prospects of the company
To do this, you need to keep money ready. Whatever money you have and want to invest, split it into two parts and then keep 50% cash aside, only invest with the other 50%. So if you need to buy more of any stock when the price falls, you have ready cash
Also, now if you have 200 shares of XYZ Company 100@Rs 2200 and 100 at Rs.2000, and then, the price goes up to Rs.2400, selling only 100 of the shares. Then, if the price further shot up, you have some shares to sell And participate in the rally to make money
Next, You sold the share and the price went up. The solution to this is never to sell all the shares at one time. Sell only 50% of your shares. So if the price goes up later, you still have the other 50% to sell and make a profit
The Golden Rule is to first do your analysis of the stock before investing and buying on tips. Also, invest only in companies that declare dividends every year. To be sure that you are not investing in loss-making companies
Every Market expert advises doing your stock analysis before investing in the stock market
But nobody tells you how
Well in my next article I will write about how to do stock analysis using various tools such as financial ratios and by checking the track records of the companies you plan to invest in
PS, If you are not Indian, then replace the Rs. into your local currency to understand the article :)
Ignore the article below 👇
One says’s “I bought “XYZ Company” at Rs.2200 and immediately after I purchased the stock price dropped to Rs.2000” I feel sad. Another comes with a different version “I sold “XYZ Company” at Rs.2000 & it went up to Rs.2400 same evening” I made an imaginary loss of Rs 400 per share Solution: You can buy more shares @ Rs.2000 and reduce your overall buying cost and this has to be done only if you believe in the fundamentals, management, and prospects of the company To do this, you need to keep money ready. Whatever money you have and want to invest, split it into two parts and then keep 50% cash aside, only invest with the other 50%. So if you need to buy more of any stock when the price falls, you have ready cash Also, now if you have 200 shares of XYZ Company 100@Rs 2200 and 100 at Rs.2000, and then, the price goes up to Rs.2400, selling only 100 of the shares. Then, if the price further shot up, you have some shares to sell And participate in the rally to make money
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