Myth: Investing in Equities is all about Luck
one ends up
and selling Low
In reality this is pure speculation
Is it all about
leverage used for investing in equities.
Reality: Investing in Equity Markets is a Science
Investing in stocks requires an in-depth understanding of the company’s business model, topline, net profits, free cash flows, return ratios and pedigree of the management.
One cannot time the market. It is next to impossible to catch the highs and the lows.
Patience and clarity of investment goals allow an investor to benefit the most by investing in stock market for medium to long term.
Markets will keep swinging between – Fear Cycle & Greed Cycle.
As a result, stocks often get over-punished or over-rewarded irrespective of their fundamentals.
Fear Cycle offers the best opportunity to build a portfolio by investing in stocks of high-quality available at a bargain price.
Greed Cycle offers the best opportunity to book profits and maximize returns while making equity investments.
The best stocks to invest in are not determined on the basis of the time you enter the markets, but on the basis of their business model, the credibility of the management and health of the financial statements.
"It is important to stay away from ‘noise’ & more important, the psychological effects of that noise.
How to invest in stocks is an art and it is about understanding businesses from a perspective of being co-owners of your capital invested."