Wealth creation with stocks... Possible???

Hi All,

This might be a question troubling all of us, all the time and especially today.... 

Let us try and find out the answer....

First of all, though profits can be made in short term with buy buying lower and selling higher, the WEALTH creation definitely happens buy buying and holding on to something for a real long term, like more than 5 to 10 years. 

So, if you want to be a 

Short term Trader - who books profits by buying lower and selling higher, please pull up yourself, as for these quick money techniques you need first of all have the inclination towards this and need to put in lot of efforts and devote some time, if not done it yet.... 

Long Term Investor - Who want to be invested in markets for years to reap its benefits with some simple investing rules.. 

So, What should I do as a successful Long term investor - -   

The answer for that can be really tricky, but to keep it as simple, please find below the information to the best of my knowledge...

People with existing investment portfolio - 

• Should of course continue to hold it. 
• As markets have gave up almost 10% from the peak of 11200, its a good time to accumulate quality stocks.
• If you are a seasoned investors for more than 5 to 10 years, then who am I to tell you... you all know it better... :)
• However, if you started investing in past 2-3 years, this might be the biggest fall you would have seen till date, and a loss of 2 to 20% of your investments portfolio is normal, depending on the quality stocks you hold.
• Markets have seen much bigger single day losses than today, and those who STAYED INVESTED then are ripping the benefits of patience.
• The fall may not be over, as markets may correct another 5 to 10% based on other analytical permutations and combinations, in order to withstand such kind of sell offs, you can  
• Select quality stocks rather than accumulating higher quantities of small priced shares
• Take an informed decision, if you cant take help of advisors, research analysts, broker, etc
• Diversify your investments across asset classes, i.e. stocks, debt (FD/RD/PF, etc.), gold (in electronic form by buying ETFs like Gold bees, etc which is almost up by 1%)
• Stock portion should be further diversified in to various sectors with large cap (less risky), mid cap (moderate risk) and small cap (higher risk) companies. 
• If your lesser capital does not allow you to diversify, buy ETFs (Exchange Traded Mutual funds) which track major indices, like NiftyBees (1/10 of Nifty value, will go up when Nifty goes up, and so on for indices specified), Junior Bees, M100, etc
• If your capital is really less, better to go with Mutual Funds investments.
• And last but not the least by all means . . .  Sip your investments... Rather than putting a lump sum amount once in a blue moon, be disciplined and invest an equal amount at regular intervals, usually a month for optimum benefits of rupee cost averaging (buying more shares when price is down and lesser shares when price is up, so that the cost of purchase is much lesser) and Power of Compounding.

People who want to start investing - 

• Please read this , if you have been scared by the news and social media today . . .
• It's better late than never.... Markets have experienced much more shocks, many times bigger than this, and still managed to give 15% + returns consistently.
• Start it now....
• Keep in mind the points mentioned above....

Hope this might help many of us to at least have a basic understanding of investing...

Cheers.....