Things I've learnt about the stock market

This post will not make you rich overnight. It's not one of those "Master the markets" crap. These are just some things I've learnt over the past one and a half year. I'm happy to share this with you. Don't expect that this is Guru gyan that you can't get anywhere else. You'll definately learn these things when you invest in stocks, but best not to learn it the hard way (Like I did in some cases)

1) Don't sell all your stocks at one go. Sell in lots. This is a wise thing to do as you the prices of the stocks that you are selling might still go higher. If you think that the prices will go down, sell more but as fas as possible, don't sell off everything at one go.

2) When the markets are falling, don't get panicky. Don't be in a hurry to sell off your stocks because the prices are falling. Sooner or later they will bounce back. Avoid trading when the markets are falling. Its like trying to catch a falling knife. You'll end up hurting yourself. As they say "When the rape in inevitable, lie down and enjoy it"

3) Set targets. Whether you buy or sell stocks, set targets and then act. If you want to sell a stock, set a target, once that target is achived, sell off the stock. The price might go higher, but it can go lower also. So act on targets. Don't get too greedy.

4) Start booking profits as soon as the market reaches "All time high" and all that jazz. It will crash as soon as it reaches some mark. Book profits at that time - sit on cash wait for the market to come down and get ready to buy.

5) Don't act blindly on tips. Research the company, check out its trading volume, price history and see which mutual funds have invested in it, etc. Compare the stocks with the stocks in the same category (Price history, comparative price). Its your money, you should know where to put it.

6) If you've invested in a slow moving stock which has not had much movement. Don't wait for it to move. It might move, but that'll take time. Get out of that stock and invest in a fast moving stock (Reliance ???? :-D )

7) Be patient. Give your money time to appreciate. Never ever take a hasty decision. You'll never profit out of it.

8) Don't put all your eggs in one basket. i.e. Have a diversified portfolio by investing in multiple sectors. Check out which sectors are hot and try to focus on them for that moment, but also keep a tab on what might come up in the future and invest in it while the prices are low.

9) Don't get obsessed with it. Playing with stocks is highly addictive. Try not to think too much about it. You will lose your focus if you think more than required.

10) Whenever you sell a profitable stock, keep a watch on its price. Buy it back as soon as it falls. These stocks can make you rich.

11) Don't just invest in stocks. See other options - Mutual Funds are doing good. Diversify your funds.

12) Avoid buying stocks when they are at all time high rates. People will say that it'll still go up. But its more likely to come down pretty soon. Buy the stock when the price comes down.

Hope you'll be careful about investing. Keep in touch with the market, play safe and you'll definately be profitable. Happy Investing :-)