Key aspects while investing in equities

1. Invest in a company whose business you understand. This is the best and tested advise from the value investing Guru Warren Buffett. To see Warren Buffett's principles, Click Here

You can find the advise of Benjamin Graham to investors, Click Here

2. In the long-term, stock prices trace earnings growth and also, the company’s ability to generate free cash flow. While there can be volatility in the interim period both in stock prices and company’s financial performance, if one has the confidence that a company can go the distance, invest. But, it is advisable for a long term to generate enough returns.

3. While the mid-cap and small-cap companies can be exciting along with risk. It is always judicious to have a mix of both these categories. A perfect stock portfolio should require a diversified approach by spreading your investment over Blue-chip, large cap, madcap and small cap stocks.

4. If one doesn’t have the time, leave it to experts i.e. mutual funds and portfolio services. It is a best advice that, enter to stock market directly requires lots of time and study to identify and buy proper equities. If you are a newcomer, a systematic investment approach with well diversified mutual funds will easily meet your requirement of equity exposure in your portfolio.

5. An important truth is, bull market or bear market will not change the fact that equities are a risky asset class. Don’t blame the market for your lose. Practical approach to equities requires patience and a long-term investment focus.

Welcome your feedbacks to Investinternals@gmail.com if you have any doubts to rectify on the above or have a comment on the article.