My 12 best investment rules, which I use to invest.

These days, despite the price of the good stock, there is no doubt that we are going through one of the most indefinite times to invest.

Before discussing the rules of investing in the stock, let me clarify that I work and follow these rules, I am not asking you to follow them, my purpose is to tell you about them.

1. I'm not afraid of the fall.

The fall in the stock market is near the corner, but no one can predict the decline, No one can tell this, when it will happen and how much hurt it will be. I do not sit in the hope that the market will fall, but I keep myself prepared for it.

2. I prefer to buy bad stock, not bad business.

If I choose a bad business and hope to earn from it, then it will be wrong , Even if I buy it cheaply. I consider that business as good, whose management is honest and  well behaved in the past, whose products are well-known and have ability reach  to every person. Businesses whose operations have been operating for the past 20 years, when shares of such a company fall, then they seem to be cheaper from the long term, and people consider it as loser. Investment is not a strategy of optimism, always investing in a good business is called good investment.

3. The rises of stock is limited.

Each stock has a limited amount of return in its lifetime. Thus, if a stock has earned its greatest return in the past, then the probability of return on investment money will be reduced. Do not put your money on the stock, because of the price are rising, but yes, bet on its underlying trade.

4. Control risk.

It is good to be brave, I focus my investments in 3-5 shares, diversification has always been a safe and beneficial strategy for me. Diversification are very helpful to me controlling the risk of permanent capital loss in some stocks. I do not put more than 10% of my investment money in a stock.

5. I don't trade.

If you have come to this blog for trading ideas, then this blog is not for you. I'm an investor, not a spectacular, I like to invest my savings rather than trade on it, I believe trading is a thrilling moment for many investors. But think that you are on a hill station and fly your savings in the air, maybe it will give you excitement, but your money will not come back to you, that's  just day trading.

6. I don't buy stock price.

I just do not buy because the stock has multiplied in the past and everybody says that it will be multiplied in the future. I buy only because my argument says that the business has been good in the past, it will be good in the future, and it is available at bargain price.

7. I don't follow buy it once rule.

Turning all my cash into gold can be great for me, but changing all cash together into stocks can be dangerous for me. I like to invest in a time interval, however, at one time I stop buying in stock even if the price of stocks is at its peak.

8. I do my homework properly before investing.

I do my own homework before buying any stock. I do my own homework before buying any stock. I do … repeat !

I read about the business that I’m going to own and try to find the reason why it is a good long term opportunity, thus assess the probability of losing my capital permanently in it.

9. I'm not fool.

When the investment is in the right direction, some people are waiting to grab money by offering their readymade stock tips and useless financial advice. When I face the people wearing such attractive clothes, who try to trap me with their smart investing strategies, which remind me of the same thing, that a fool and his money is invited everywhere, and fool and his money Can be easily parted, and I am not a fool.

10. I don't bet on diversification.

I'm not Warren Buffet ! I do diversification, but I always keep in mind that the diversification ensures the proportionate average outcome of the shares, not security. Apart from this, diversity will not protect me from my worthless investment decisions.

11. Hope is not a investment strategy.

There are many investment strategies, such as buying cheap stocks, buying a high-quality business, buying at a lower price etc. But, hope is not from these. After good studies, I invest in business and have patience with them. I am ready to accept the reality, especially when it is harsh, and then with the changing times, I am ready to reconsider my decisions. But I always check the hope out of the door.

12. I respect luck.

There have been many such moments come in my investment life when I got brave return within 6-12 months. Most of time I give credit  to choose the right stock at the right time. But luck also work for me and I respect it. If you are one of them, then I suggest that respect the luck properly. Luck is a very difficult thing to deal with psychologically, because our brain can easily come up with a cause for everything. But the investment is largely about luck. Respect it or it will disrespect you.

While investing in stock market, I keep stress away from myself. Because in my life many things are bright and more beautiful than the rising stock price.

I hope these investment rules will benefit you. If you have any suggestions regarding investment, let me know.