1. Avoid Herd Mentality
If everybody around is investing in a particular stock, the tendency for potential investors is to do the same. But this strategy is bound to backfire in the long run
2. Take Informative Decision
Proper research should always be undertaken before investing in stocks. But that is rarely done
3. Invest in business you understand
Before investing in a company, you should know what business the company is in.
4. Don't try to time the market
A majority of investors try to time the stock market, even though it is something that financial planners have always been warning them to avoid, and thus lose their hard-earned money in the process.
5. Do not let emotions cloud your judgement
Fear and greed are the worst emotions to feel when investing. Emotions may play a negative role in investing as it usually makes an investor take an impulsive decision which ends up not being in his/her favor and they lose money. It is best not to be guided by emotions.
6. Create a diversified portfolio
Diversification of portfolio across asset classes and instruments is the key factor to earn optimum returns on investments with minimum risk
7. Monitor rigorously
Any important event happening in any part of the world has an impact on our financial markets. Hence, we need to constantly monitor our portfolio and keep affecting the desired changes in it.