Investing Is Laying Out Money Now To Get More Money Back In The Future. Value Investing Has Been Explained Earlier.
Investing Relies On The Price Paid Being Less Than The Value Of The Purchase.
In A Bear Market…., Which Is The Ideal Time To Invest, People See That The Good Companies Are Selling For Silly Low Prices.
But Just Like A Person Who Sees Rs. 100/- Lying On Road Thinks That It Can Not Be A Genuine Rs. 100/- Note, Otherwise Somebody Would Have Picked It Already. Hence Ignores It. The Same Approach People Apply In A Bear Market When they do not buy shares of companies selling cheap.
In A Bear Market Its Easier For A Person To Admit That He Has Committed A Murder Or Has Stolen Something Than To Agree That He Owns Shares of a co..
While investing in equity of cos. One has to have an investment time frame of approximately more than five years.
If one requires the money in future say after 1 year or before 5 years, then it is better that one does not invest in equities.
Because after you have invested, equity markets may fall sharply and as you might require the money after a short period of time, you might be forced to sell at a loss. This is what happens in practice.
Thursday, August 14, 2008
Subscribe to:
Posts (Atom)