Ten golden rules of dalal street -2

Rule 6

Keep the winners, sell the losers. Stay on top of your investment. Check constantly for stocks that are not performing and eliminate them from your portfolio if the outlook does not seem promising. The way, you will have all winners left in your portfolio to take you to your goals.

In exuberant times, we all tend to believe that the good times will last longer than they actually will. And before D-day, we will be able to sell our investments that were bought at unjustified level. Just then, it happens that the markets turn and before we can sell out, we are left holding the bag. For this reason.

Rule 7

Avoid being the “Bigger fool;” it is imperative that you recognize the difference between price and value. Buy value not momentum.
When investing in stock your head should prevail over your heart. Resist the urge to get consumed by market chatter. Ignore hot tips from dealers and friends. It is advisable to do your own home work. As the result

Rule 8

Pick stock with your brain, not your heart.
Large-caps are the ones that have already proven themselves over longer periods of time and have balance sheet acumen, strong cash flow and brain to manage business effectively according to prevailing situations and realistic opportunities available.

Rule 9

Prefer large-cap stocks to small and medium-caps. Investment in small and mid-cap stocks requires expertise and strong tracking abilities, that without, your portfolio will underperforms.
Do not short sell a stock just because it is going up, and thus, one day it must come down. Newton’s law is not applicable to the markets. What goes up does not necessarily come back down! If companies are able to sustain earnings’ growth for long periods, then its stock may go up, up and up, or it can ever remain high without any reason for a long period of time. Because of this,

Rule 10

Markets can remain irrationally up, or continually climb for the right reasons. Therefore, never go short. It will expose you to unnecessary risk