Lot's of people ask me, What was the Right time to buy the stock? So in these blog u get the answer...
"if you are not willing to own a stock for 10 years, then don't even think about owening it for 10 Minutes" - Warren Buffet
In above quotes warren sir explain us that, the wealth is create in long term not in short term. Buy the stock for longer term prospects for gaining multibagger return on Investtment.
So now question is, What steps to be taken before buying any stock?
In these question i already give the answer to u in "7 steps to do before buying stock" in that blog.
So Now i give u the idea about what extra parameter u do in high valuation market. Because so many stock is overvalued, that's way u need extra parameter to find out best stock. So let's begain....
1. Fundamental Strong Share:-
Most of the people ask me a How to do fundamental analysis ? In high valuation market u need to check the Quarterly Result of the company, after that u check the Balance Sheet of the company & watch the Interview of the company CEO, MD, etc.
2. Buy on dips
Many People directly put there all fund into share's, that is way they loss the opportunity of Buy on dips, because of volatile market the prices of share is up & down, In fact because of external factor market crash possibility was there. so now i will give u example...
There are two brothers Ram & Sham. Both brothers have rupees 1lack each. So one day they decide to invest in Reliance Industries Share.
On next day, Ram directly buy 200 share of reliance industries @price of 500 they directly put there 1 lack in reliance share, but on another side sham only buy 100 share of reliance industries @price of 500 they only put there 50k into share & 50K for reserve. After the 1 hours of buying share by both brother there is news in TV about corona virus & market was crash. Ram can't have money for buying the extra share of reliance industries but sham have. After the 1 week the reliance share price was near about 280 & sham have bought another 20k share for him for average there buying level share price, but ram can't have that opportunity.
3. 10 to 15% formula
These formula is very easy & best for investment. Most of the people buy the right stock & these stock give them good return & they want some more share quantities to add in there portfolio. Now they confused what price they enter again in that stock, so 10 to 15% formula help him. U enter in that stock when that stock was down from there high about 10 to 15%. Following example help u to better understand ..
I give my personal experience to u. I bought some quantity of Infosys ltd @ price of 400 after the 1 year the Infosys Ltd share price is near about 950. Then i want some more quantities of Infosys but i'm little bit confused what price i enter for new quantities. So one day because of external factor market was crashed & Infosys share is near about 836 then i decide to buy that stock again. Because Infosys share was crashed near about 12%.
So if u want to add some quantities of share which gives u good return previously then u buy that stock after they 10 to 15% down from there 52 week high.
4. 100% perfection is not there
So many people have frastation on there face when there predication was go wrong. In market there was no world of 100% perfection, because warren buffet also say they didn't have 100% correct predication. In market u learn from your mistake. So don't think for 100% perfection, In earlier in stock market take smaller risk for learning don't take high risk in earlier journey.
5. Portfolio Diversification
Don't Put your all egg in one basket because if basket broken then u lost your eggs, so create some basket for some egg. In stock market don't put your all money in one share because if something wrong happen with that stock u lost your fund. So diversify your portfolio.
6. Focus on the Business Model of the company not on there share price
So many people focus on share price of the company that is way they lost there money in market. The big investor are focus on business model of the company. If company have good business then there share price is go upper in future but company business model was not good then u need to be cautions.
I hope u satisfied with that blog. If u have any quarry then comment below we give replay to u as soon as possible.