Lessons from Stock Market Investment

I have been learning and testing the stock market for a few years, and here are some key takeaways as a common investor (not a trader).

• Book the profit as much and as soon as possible.
• It’s not important how much profit or loss is showing in the portfolio. The important thing is how much money you have in your portfolio.
• Don’t be unhappy if the market is going down; it is an opportunity to invest and make a profit in the future.
• Don’t be too happy if the market is high. Until the profit is realised, it’s still on paper.
• The market always gives corrections. Be ready to sell or buy at the right time.
• Rotation of money is important.
• Try to keep money for at least 365 days to avail the benefit of LTCG.
• The yearly target should be at least book 1.25 lakh in LTCG to avail tax-free money. Book profit just to achieve the target and re-invest. The rest can be adjusted using tax-loss harvesting.
• Invest only in good stock. Most of the good stocks will give a profit.
• Every segment has its own benefit. Choose wisely. e.g., NIFTYBEE ETF (based on Nifty 50) is better than any Nifty 50 MF due to its expense ratio, and it is not required to be analyzed a lot by the fund manager. Again, actively managed MF is better than a passively managed ETF as it requires expertise to rotate money into the proper stock.
• Only investment is not enough to make one rich. The stock market is not a money-making but a money-protection instrument. There should be income streams where from money is being ingested into the market. So it’s better to invest time in generating money rather than analysing the market for the whole day.

All the points might not be agreed upon or applicable to you. Invest with proper knowledge or take financial help.