7 mistakes to avoid
this Mahurat Trading
Want to invite Goddess Lakshmi home this Diwali? Then avoid these mistakes that stock
investors often make. This can ensure your Muhurat Trading is a happy one.
Don’t copy others
It’s important to ask for stock-related advice. You need all the help you want. But
remember, it’s only guidance. Do not copy the entire strategy. Apply the strategy to your
investment goals and see if it fits. In the case of stock recommendations, see if the
investment duration matches. Also, check the risk appetite. Only then should you go
Don’t be one in the herd
Let’s say you read about a successful investor buying XYZ stock. Or saw people
starting to buy stocks of a particular sector or company. Re-consider before buying it for
yourself. You may not really understand the business. Or you may have missed the right
price. In this case, it’s better to wait and re-evaluate. You could potentially get caught
into a stock bubble.
Many car owners hold on to their first car for years. That car, even after it stops working,
has sentimental value. Don’t do this with your stocks. It may have been your first stock;
your most favorite one, or the one that surprised you. Analyze it objectively. If it’s done its
duty, it’s time to sell.
This one comes from the pages of Behavioral finance. Let’s say you come across a
particular sectoral trend. That particular sector is not doing well. Not every company may
be suffering. Plus, some companies may have the bandwidth to survive. So don’t sell all
the stocks of the sector. You may end up giving off the market leader in that sector too.
Don’t ignore facts & probability
Stock charts can give a great deal of information about the trend. But it needs to be a
scientific study. Otherwise, you can look at the short-term trends and make wrong
forecasts. Base your judgement on real ‘facts’ and ‘probabilities’. This can help you make
the right decisions and pick the correct stocks.
Don’t run away from volatility
If you find yourself looking at fluctuating prices, don’t worry. Volatility is not the enemy.
You have picked the right stock after lots of research. Trust this research and analysis. In
the long-run, this volatility barely matters.
Don’t give in to the panic
Did your stock suddenly fall 4%? Do not panic. It’s not time to sell. It’s time to research
and analyze the factors affecting your stock. Look at the news and developments.
Check if they have harsh long-term consequences. Most probably, the fall could have
been a broad-market movement. In such a case, it’s better to buy more cheaply or wait
for a bull-trend.
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This is an editorial content, our research should not be considered as an advertisement or advice, professional
or otherwise. The investor is requested to take into consideration all the risk factors including their financial
condition, suitability to risk return profile, and the like and take professional advice before investing.