A lot of investors go about their investments in an illogical way. They are given a tip from their broker on basis of some rumor or news. They impulsively buy the scrip and afterwards wonder why they bought the stock.
Such Behavior is foolish and must be avoided. The moment you receive a tip on a stock, confirm the news on bse india or nse india website. The news, if any, will be on these sites; be it dividend payoffs, announcements, earnings, corporate move to buy another company, fight of top management or any other news.
Broadly one should abide by following guidelines:-
1. Business of Company
Buy stocks of only those businesses that you understand. Once you have bought a stock, keep watch on quarterly results of that company and also keep watch on the general trend in the sector of that stock.
2. Study the past performance
All companies present particulars of their fiscal operation in their yearly reports. Study their past performance and then invest.
3. Know the promoters
The Management team and promoters of a company are key people who bring growth to a business. Invest in companies that have good promoters,...