The Modern Rules of Share Market

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1. Be Wary
One of the important rules is – do not to take anything personally. Any tip about the next hot stock from an article, a news report, or a piece of advice from a friend will not help. There is only one person to trust when it comes to committing money – that's you! 
The advice from others can be considered & verified but cannot be the sole basis of any investment decision.
 
2. Look ahead
Successful investors consider the company's current performance, future plans, competitive advantage, etc. Then, they invest in what will happen in the future. They are always forward-thinking.
If you are looking at now & considering only the short-term gains, you might miss the big move. Instead, always find companies with a long track record of steady growth & promising future plans.
 
3. Patience is the key
The market rewards those who stay invested with patience. The market is volatile & comes with a cycle of uptrends & downtrends. The emotionally matured ones who hold the shares through the ups & downs of the market will eventually gain the most. In 2011, the share price of Titan was ₹191 & in 2021, the share is trading at ₹2,100. That's approximately 963% in 10 years.
 
4. Have conviction
Although it is a basic rule of the market that – do not put all your eggs into one basket, it is essential to have some conviction in the trade you are getting into. Most investors believe that one should not invest more than 10% in one stock. This might save your portfolio from a considerable amount of loss, but it will also reduce the profits that you could have earned from your multi-bagger pick.
 
5. Do the research
According to Mr. Warren Buffet, buying a wonderful company at a fair market price is important than buying a fair company at a wonderful price. A company with sound financials & business plans will perform well in the long term. So even if you buy it at a slightly higher price, it will ultimately result in a profitable bet for you. Therefore, your focus should be on research rather than buying the share at the lowest price or waiting for the "right price." 
6. Let the winners run
Be patient with winning trades & exceptionally impatient with the losing ones. It is essential to book the loss on the losing trades & hold the winning trades with patience. In simple words, one should book the loss instead of averaging the price. If you have identified the multi-bagger, then you should stay put.
On average, around 30-40% of your picks will earn large profits for you & build your portfolio, as long as the profits are large & losses are negligible.
 
7. Conventional investment rules no longer stand true
There is only one rule of the market that there is no rule. The market always surprises the market participants. You cannot time the market and guess what will happen next,  you cannot be 100% sure that you have cracked it.
Some timeless policies of the market include buying more to bring down your average per-unit cost, buy low & sell high.
If you are stuck in a bad trade, it is better to book the loss & get out of the trade rather than investing more in it & average the cost per unit.
Similarly, in the current bull market or generally in any market, no one can buy at an exact low or sell at an exact high.No one can identify that this is the lowest price of the share for the day or this will be the highest price of the share. Instead of following the old investment rules, observe the market & make your own rules suitable for the current market.

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