Exposure to equities in your early days of career helps you to role in guaranteed high returns in future. They can help you achieve your financial goals without getting into the need of taking a personal loan, home loan etc., only if you pursue a systematic and disciplined behaviour of investing.
It is important for an investor in the stock markets, to follow the above said principle : “Buy right and Sit tight”. When investing in stocks patience and discipline are the key factors for your long term financial goal to be achieved. Small corrections in the prices of your stocks should not really affect you as they are temporary in nature.
If you are an aspirant of being a long term investor, then any time is right for you to invest in the market as long as your stock selectin is good. Small changes in the prices of your stocks shouldn’t be a matter of concern as it is likely to be stabilized over a period of 3-5 years.
Short term investing strategies are basically for traders and momentum players who need to take into account various technical factors. But fundamentally, if a stock is strong, despite changes in the short run, it will provide excellent returns in the long run.
Investors should realize that, the market has cycles both up and down. Neither the brokers or investors are in a position to analyze how the markets will react. It has always been observed that, in a rising market investors are likely to reassess their portfolios, in order to make more profits, which could actually cost them dearly. What must be understood is that investors should consider the company’s fundamentals and share value.
So, try maintaining a diversified portfolio with good quality stocks ranging from 10-12 in number, in 507 sectors like auto and banking stocks, commodities such as steel and a few quality FMCG stocks, over a long term approach might well do the trick.