How to invest in shares on long term basisFinance?(refer to my previous article)Since it is your money that your are going to invest and the fruits of the investment is for your later life as well as for your family members, so take double care in judging the shares that you select to invest. Don’t go by the trend of the market. Market trends are only for short term, in which vested interested persons will surely have a hand in the unusual and unrelated movement of price and quantity of the shares. It could be a raider acquiring that particular share or someone having an insider information might be doing the damage. It is your money, so avoid such kind of shares from your purview to invest. Also never attempt to invest all your cash reserves in one particular share, though you have selected it after making a detailed study of that share. Since your judgment will be based on the future performance of the share. future is not that easy to predict. So invest only about 30persent of your cash reserves in shares, 40 percent in immovable assets or bullion and the remaining in other debt instruments. Also don’t jump into the wagon to buy a particular share at any price(refer my previous article)

When you want to buy a particular share and by chance your are short of money to buy, let it go, and drop your idea, since the cycle of up and down will come and you can take your chance at the next opportunity. NEVER borrow to make investment in shares, whatever the merit of the share.

Also keep track of the price to earning ratio of all your shares and that of the index. When the index price to earning ratio crosses 20 be watchful and when above 23 en cash your investments. History warns us of the trouble whenever the index’s price to earning ratio is above 23.

Almost majority of investors go by trend ie when the market is in a bull run they want to jump in and benefit, which will put you in troubleshare investment. No speculator has made honorable money from the market. Stock market history has lot of instances of people who had indulged so and had badly reminded about the perils of such activity. People always invariably hesitate to buy the shares when the market is going down, ignoring even the fact that it is available at the BUY ABLE PRICE arrived by them(refer mu previous article). Why is this? Permit me to say that it is sheer greed. Always set your target BUY price and SELL price and go by that, in all circumstances.

When you are not having a target BUY price and SELL price for your share, your are misguided by the downward trend of the market and you always miss the opportunity to buy at your BUY price and sell at your SELL price.Human nature is that people wait and want the market to go down further, when it is downtrend and go up further, when it is uptrend. but the market will not have its journey ONE WAY only, it has to and will always turn around to continue its journey the other way, till it is made once again to reverse its journey. So, when you are sure about your target BUY price and SELL price, you will always be sure to GET IN and GET OUT of that journey without any loss for you.

Do not also go by, any advice, by the broker, since he will be compelled more by the commission he earns rather than the performance of the share. Similarly, many and most of the shares announced as IPOs, are always invariable introduced when the markets are in bull phase. We have seen cancellation of many IPOs when the market turns bearish. Make your judgment, even when financial institutions back any particular IPO, they have their own reasons for it.

So, the sure way to invest in shares is to learn the fundamentals, detailed study of that particular industry, choose the company as per its value(refer my previous article) and be bold to act according to your judgment. So invest in fundamentally good company, with good track record, and also try to buy (if your cash reserves permit) during downtrend, so as to bring down your average cost, by which you will be turning the trend to your advantage, rather than sulking at it.

BR PREPARED FOR THE OPPORTUNITY, IF MISSED, IT WILL TAKE ITS OWN SWEET TIME TO RETURN.

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