Sandy is a smart stock market investor. He is rational and takes decisions based on facts.
In this post, Sandy tells you what to do and what not to do as your undertake your journey in the world of stock market investing.
Be a smart investor! Be like Sandy!
1. Sandy believes that knowledge of what drives the markets is essential to make money in the stock markets.
Recommended Read: What causes Stock Prices to Rise or Fall?
2. Sandy takes his investment decisions based on facts.
3. Sandy does not let brokers trade on his behalf.
4. Sandy believes in investing in companies that have the potential to grow in the coming years.
5. Sandy knows that past performances are not always an indicator of future potential.
6. Sandy likes to understand the business of the company before investing in it.
7. Rather than trying to time the markets, Sandy knows that there are always good investment opportunities in any given market scenario.
8. Sandy knows that competitive advantage is gained from having a product or service offering that is distinct from its competitors.
9. Sandy does not fall for market rumours.
10. Sandy knows the value of a good management team.
11. Sandy does not attempt to catch a falling knife without fully understanding what has led to the fall in price.
12. Sandy appreciates the fact the the economy and the markets are cyclical in nature.
13. Sandy knows that everyone makes mistakes. What is important is to learn from those mistakes.
14. Sandy limits losses by trading with a stop loss.
15. Sandy does not borrow money to invest in the markets.
16. Sandy does not run after over-night riches.
17. Sandy knows that if something sounds too improbable to be true, in most cases it actually isn’t.
18. Sandy knows that patience is the key to being successful in the stock markets.
19. Sandy keeps himself updated about what’s happening on the economic front.
20. Sandy understands that derivatives like options and futures are complex products and does not trade in them without developing a through understanding about the products and the risks involved.
21. Sandy constantly keeps track of the investments he has made to access if his portfolio needs any tweak.
22. Sandy knows that diversifying his portfolio across industries would help him avoid concentration risk. At the same time he is aware that diversification might not make much sense when the size of the investment portfolio is small.
23. Sandy does not buy or sell based on an analyst’s recommendation. He digs deep into the basis behind such recommendation.
24. Sandy knows that just because a stock is trading near its 52 weeks high/low, it does not in itself create a case for buying or selling the stock.
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