There have been many wise people who were and are pro’s in the stock market field made huge profits and considered Gurus and their words of wisdom serve as Mantras, which should be understood properly and be applied in Stock Market Investor’s investment decisions. Let’s quote and discuss a few of them.
1.
Invest for the long haul. Don’t get too greedy and don’t get too scared.
Shelby M.C. Davis
Here the Guru suggests us to maintain the balance and be pragmatic in our approach.
Set your target, choose your stock and trust the process.
Market upheavals are constant, let’s not be panic mode and sell at every fall, market generally rises again, so if the stock has potential then it’s worth keeping it till the investor attains his target.
2.
Prepare for losses. Losses are a part and parcel of a stock market investor’s life.
Rakesh Jhunjhunwala
Losses can be part of Investor journey.
If there is a bad performing stock from a bad performing company then it’s better to book loss and close it than hanging a falling knife.
Getting rid of a bad stock at early stages results in less loss, which an investor can always recover from next careful selection of best performing stocks.
3.
If you aren’t thinking about owning a stock for ten years, don’t even think about owning it for ten minutes.
Warren Buffett
This quote is self explanatory, careful consideration should be done while selecting the stock, for secured investing journey.
This mantra will be more useful for long term investment.
4.
Always go against tide. Buy when others are selling and sell when others are buying.
Rakesh Jhunjhunwala
This advice is definitely not for the beginners. It works only if investor is in position of making a perfect stock selection decision.
Markets are very unpredictable. Suppose the investor had a very good session of market going on and market suddenly falls, it may recover in a day or couple sometimes, or the fall may continue for days and months.
So if investor follows Rakesh Jhunjhunwala advice seriously here, he is bound to make huge losses from the falling market, instead if investor considers every fall as an opportunity and add in small quantities at every significant fall, then when market is up and right, he will be bestowed with best returns.
5.
Far more money has been lost by investors trying to anticipate corrections, than lost in the corrections themselves.
Peter Lynch
Sometimes markets just move forward or a particular stock just progresses, it sets new high points, no looking back, such stocks can be called jackpots.
So always waiting for a fall is not right in investing journey, if Investor trusts a stock, it should be bought even at small quantities, if there is no fall, it should be accumulated further.
6.
Much success can be attributed to inactivity. Most investors cannot resist the temptation to constantly buy and sell.
Warren Buffett
Unless you can watch your stock holding decline by 50% without becoming panic stricken, you should not be in the stock market.
Warren Buffett
Patience is key. Sometimes market would not cooperate, investor should keep calm, trusting his decision.
If a stock is worth, it will recover eventually.
7.
I make no attempt to forecast the market—my efforts are devoted to finding undervalued securities.
Warren Buffett
This should be the mindset of an investor, if investor has money his focus should be only in accumulating decent stocks.
Market is beyond predictions, anything can happen any moment, all technical indicators cannot stop a market from fall caused by natural disaster, a sudden terror attack which can be detrimental to market or war etc etc. But a great stock can survive all the tides and can become a victor.
8.
History provides a crucial insight regarding market crisis, they are inevitable, painful and ultimately surmountable.
Shelby M.C. Davis
Markets can survive any fall.
No need of panic selling, but sometimes the stock price may go down and down, at that time some investors sell the stock with minimum loss and later bought it again at lower prices and made profits. And in other cases where market recovered in few days and stock regained previous value in few days and investor ended with minimum loss. It’s investor decision, if investor can wait or prepared for minimum loss.
9.
Big companies have small moves, small companies have big moves.
Peter Lynn
Established or reputed stocks generally don’t have high volatilities.
No major ups and downs, they are generally steady and safe.
Even if the stock falls along with the market, it will bounce back to its steady state eventually.
Stock Market and stocks generally go hand in hand, when market falls most of the stocks fall, only few where demand is anticipated rises, for example defence stocks at the time of war, health services stocks at the times of health scare, pandemics etc.
10.
Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1
Warren Buffett
Investors motive should be to multiply capital and should be cautious not to make hasty decisions and loose money. Careful analysis of the stock is key before investing. Even if unprecedented event strikes and the stock losses value, it’s important to make a logical judgement about the possible future outcome for the stock and if it’s bleak, better to exit with minimum loss and stick to the general advice of “Don’t catch a falling knife”. There can be no end to the fall and sometimes a falling stock may never recover to its previous price range.
Disclaimer
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