Avoid the herd mentality: Do not invest in a stock just because everyone around is buying a particular stock even when it’s selling at high valuations. Take your own time do some research and then invest in any stock. As following the is bound to backfire in the long run.
Srei Equipment Finance held 12.71% stake in Eros Media earlier, post invocation, it stands at 10.63%
Choose fundamentally strong stocks: If you are investing at high levels then, you must invest in stocks of companies that have robust fundamentals. The company must be a leading player in its domain with a strong balance sheet and corporate governance.
Diversify your portfolio: There may only be small-cap or mid-cap stocks in your portfolio. In a rising market, you may be more likely to lose money with a concentrated portfolio. Diversify when markets are high. Diversification requires stocks of different market capitalizations that are stable.
Never invest in something you don’t understand: You should never invest in a complicated financial product. Ensure that you understand what you are getting into before investing. Moreover, invest in a financial product that has an investment history of 5 to 10 years.
Keep Your Expectations Realistic: Equities offer high returns than fixed-income instruments, in the long run, however, it’s vital to keep your expectations realistic and have faith in your selection when investing at higher levels. Note that markets never move in a straight line.
Stay Committed for the Long Haul: Equity investment tests your patience. You need to remain committed to your investment for the long haul to maximize gains. If you have made a fundamentally sound investment even at a higher level then short-term blips shouldn’t deter you from exiting.
Goal-based investing approach: You should choose a stock depending upon the term and the risk profile of the goal. Market highs and market lows will come and go. The volatility shouldn’t bother long-term investors. You should keep an eye on your goals and invest in a systematic manner.
